Dis-Chem fined R 1.2 million for price-hiking

DURBAN – Pharmacy chain, Dis-chem  has been found guilty for hiking the price of surgical face masks since the beginning of the Covid-19 pandemic. They have been found guilty by the Competition Tribunal of price gouging and have been fined R1.2 million.

Consumers had sent several complaints of excessive price hiking of masks to the competition watchdog, who referred the case to the Tribunal by the Competition Commission in April 2020.

In May, Dis-chem argued that the price increase was due to disruption in the supply of masks and the price increases by suppliers.

The Tribunal had found Dis-chem failed to comply with section 8(1)(a) of the Competition Act. The Tribunal stated that “Although the first case of Covid-19 in South Africa was only reported on 5 March and the National Disaster proclaimed on 15 March 2020, South Africans were already affected by the rampant spread of Covid-19 from January, with global supply chains being disrupted, International travel and events being cancelled.”

“We find that in the context of a global health crisis, with excess demand of surgical masks, considered to be essential in the fight against Covid-19, Dis-Chem has demonstrated that it enjoyed and exerted market power by materially increasing its prices, without a significant increase in costs, and significant increase in margins. But for the economic conditions brought about by the outbreak of Covid-19, it would not have been able to implement such material price increases in surgical masks.” they said.

 

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