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Competition Commission gets tough on virus-related price inflation

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The commission has been inundated with complaints that traders are abusing the Covid-19 pandemic to inflate prices of food and essential goods.

CAPE TOWN – The Competition Commission said on Wednesday it had referred a case of price inflation of face masks with mark-ups of up to 500% to the Competition Tribunal.

The case of excessive pricing against Babelegi Workwear Overall Manufacturers & Industrial Supplies CC will be heard by the tribunal on April 24.

Commission spokesperson Sipho Ngwenya said the commission has been inundated with complaints that traders are abusing the Covid-19 pandemic to inflate prices of food and essential goods.

“The commission has been inundated with hundreds of complaints from consumers about prices of certain essential goods and other basic food items that have suddenly skyrocketed,” Ngwenya said.  

Competition commissioner Tembinkosi Bonakele said the body had gone beyond appealing to the conscience of companies and prosecutions would follow.

“The commission has now gone past the stage of moral suasion and appeals to patriotism to stop abuse of market power by those seeking to exploit consumers at the worse possible time. The law must take its course. We will see a wave of prosecution of firms in the next coming days.”

The case against Babelegi is the first to be referred to the tribunal for hearing.

The commission investigated the matter and found that between January 31 and March 5 Babelegi increased its prices of face masks from R41 per box up to R500 per box, “earning during this period mark-ups in excess of 500%”.  

“The commission further found that Babelegi’s prices for facial masks increased by at least 888% when comparing the prices charged on December 9, 2019, to the prices charged on March 5, 2020. Mark-ups (and not prices) significantly dropped after March 18, 2020, allegedly after the supplier increased input prices. 

“The supplier is now also under investigation for excessive pricing.”

Babelegi is supplied by Securo.

The commission noted that face masks fall under the category of medical and hygiene supplies and have therefore been identified as essential goods for the prevention and escalation of the Covid-19 pandemic.

– African News Agency