CompCom slaps essential services chancer with R11m fine

An essential goods distributor is on the hook for R10.9 million after hiking the prices of personal protection gear.

This follows an investigation conducted by the Competition Commission after it obtained information against wholesaler and distributor Matus in relation to the inflated prices of dust masks (FFP1 and FFP2 class masks).

Matus also distributes overalls, hand sanitisers, fire protective gear and first aid kits.

It has offices in Johannesburg, Cape Town and Durban and satellite branches in Port Elizabeth and Mbombela, and has agreed to pay an administrative penalty of R5.9 million after it admitted to inflating its gross profit margins with regards to essential hygiene products.

An announcement by the Competition Commission on Wednesday says Matus will also contribute R5 million to the Solidarity Fund for Covid-19.

“Further, it will, with immediate effect … reduce its gross profit margin on dust masks to acceptable levels for the duration of the state of national disaster,” it adds.

It says Matus has agreed that for the duration of the state of national disaster it will not increase its prices above those that were applicable on February 16, “for as long as such products remain as essential in terms of the Consumer Protection Regulations or any subsequent amendment or replacement of these regulations”.

Retail analyst Chris Gilmour says that currently, essential goods suppliers “keep pushing it”.

“Until the commission jumps on them [they will continue to do so],” he adds.

“It is excellent that an example is being made of this company, and I do believe there are plenty more companies around the country inflating essential goods [prices] as well, but this should put a fear of death [into] companies also increasing prices during this time.”

Listen to Nompu Siziba’s interview with Calexico owner Larry Hodes: