Pharmacy Fined $71 000 For Hiking Face Mask Prices

indafrica July 7, 2020
Updated 2020/07/07 at 3:07 PM

Pharmacy chain Dis-Chem has been fined R1.2 million for hiking the price of surgical masks at the start of the Covid-19 pandemic.

Dis-Chem was found guilty by the Competition Tribunal of price gouging, and fined R1.2 million, for hiking the cost of surgical face masks.

The case was referred to the tribunal by the Competition Commission in April after the competition watchdog received complaints from the public about excessive pricing for masks.

In its defense, Dis-Chem argued it has been forced to hike prices as a result of disruptions in supply, as well price increases by suppliers. It claimed that its competitors had followed suit.

Despite DisChem’s claims, the Competition Tribunal found the pharmacy chain guilty of contravening the Competition Act by charging excessive prices for three types of surgical face masks namely; SFM 50, SFM 5, and Folio50, which the tribunal said was to the detriment of consumers during March.

The tribunal said, “In our view, Dis-Chem’s massive price increases of surgical masks during the complaint period … are utterly unreasonable and reprehensible. Poorer customers would have been excluded from accessing the masks by such exorbitant increases, other customers would have spent more on these items as a percentage of their disposable income.”

The tribunal said it would publish its comprehensive reasons for its decision in due course.

To date, the Commission has referred and settled 25 COVID-19 related cases to the total value of R14
052 552.21 of which R5 564 649.51 has been donated to the Solidarity Fund.

In related news, Caprichem has agreed to pay a settlement amount, comprising of an administrative penalty and contribution to the Solidarity Fund totalling R600 000.00 for allegedly charging excessive prices in breach of Consumer protection regulations. Caprichem will pay an administrative penalty of R500 000.00, and a contribution of R100 000,00 to the Solidarity Fund.

Caprichem has agreed to reduce its gross profit margin on 5L hand sanitizers for the duration of the state of the national disaster.

The settlement follows the Commission’s complaint referral against Caprichem for excessive pricing of 5L
hand sanitizer to the detriment of customers and consumers.

The investigation had revealed that
Caprichem had excessively increased its gross profit margin by as much as 91% and its net profit margins
by as much as 1918% on such products.

Share this Article
Leave a comment

Leave a Reply

Your email address will not be published.