Compcom sends mask manufacturer to court for suspected price-gouging

A company believed to have hiked the price of face masks by 500% during the coronavirus epidemic has been sent to a South African court, and more prosecutions for suspected price gouging will follow, the competition watchdog said on Wednesday.

The Commission is investigating more than 300 complaints against retailers and suppliers for over-charging essential commodities at a time when South Africa is already reeling under a shortage of medical supplies and equipment.

President Cyril Ramaphosa announced a 21-day lockdown from March 27 and later extended it to the end of April to contain the spread of coronavirus. South Africa has already seen about 2 500 coronavirus-led infections and 34 deaths, according to the health ministry.

The lockdown has barred sale of non-essential items such as clothes, stationery and cosmetics but it also disrupted supply chains for groceries and other essential commodities such as sanitisers and medicines.

Most complaints of excessive pricing were related to hand sanitisers and face masks, followed by toilet paper, flu medication and other products during the coronavirus outbreak, the Competition Commission said last month.

The Commission said the first case that was referred to the Competition Tribunal was against Babelegi Workwear Overall Manufacturers, which had hiked the price of face masks by more than 500%.

Tribunal – which makes rulings and can prosecute cases – intends to hear the matter next Friday, the Commission said.

“The Commission investigated the complaints and found that during the period 31 January 2020 to 5 March 2020, Babelegi increased its prices of facial masks from 41 rand per box up to the highest price of R500 per box,” it said.

The Commission found that Babelegi’s prices for facial masks increased by at least 888% when compared with the prices charged on December 9 to its March 5 pricing.

Appeal to patriotism 

In statement, the Commission made an appeal “to patriotism to stop abuse of market power by those seeking to exploit consumers at the worse possible time”.

Commissioner Tembinkosi Bonakele said there would be a wave of prosecution of firms in the coming days.

Among other cases the agency is investigating are a pharmacy that earned more than 300% mark-up on face masks and hand sanitiser, a wholesaler of chicken that marked up its price by half, a hardware that allegedly increased the price of surgical gloves from R99.99 to R170.

These are under investigation and have yet to be referred to the Tribunal, it said.