COVID-19: EXCESSIVE PRICING – A TOTAL OF 18 CONSENT AGREEMENTS CONFIRMED BY THE SOUTH AFRICAN COMPETITION TRIBUNAL
The South African Competition Tribunal (Tribunal) has reported that it had confirmed as orders, a further three consent agreements relating to COVID-19 excessive pricing. The consent agreements represent settlements reached between the South African Competition Commission (Commission) and firms alleged to have engaged in COVID-19 excessive pricing.
This brings the total number of consent agreements confirmed by the Tribunal thus far to 18 (see our earlier newsflashes accessible here, here and here). The Tribunal’s orders represent full and final settlement of these matters.
- TNT Basic Trading
Following an investigation, the Commission - having regard to historic margins - found that TNT’s mark-up and gross profit margin on the sale of FFP2 respiratory face masks increased to unreasonable levels during the period between January and February 2020.
The Commission found that TNT’s ability to escalate its prices during and due to the COVID-19 crisis, demonstrated a form of market power in the Gauteng Province, and therefore amounted to an abuse of dominance.
TNT admitted to excessive pricing and concluded a consent agreement with the Commission in terms of which it undertook, inter alia, to donate face masks to the value of ZAR 150 150 to community benefit organisations, including the Tsakane Society for the Care of the Aged, and reduce its mark-up on FFP2 respiratory face masks to an agreed maximum percentage with immediate effect and for the duration of the national disaster.
- Auction and Salvage Net (Pty) Ltd
Without admitting liability, Auction and Salvage Net, a hardware store in Krugersdorp, concluded a consent agreement with the Commission agreeing, inter alia, to donate ZAR 9 521.74 to the COVID-19 Solidarity Fund. The agreement follows an investigation by the Commission in which it found Auction and Salvage Net had allegedly sold face masks in March 2020 at excessive prices.
- Samy’s Wholesalers CC
Samy’s, based in the Northern Cape, admitted to pricing hand sanitisers excessively. This, following an investigation by the Commission which revealed that that Samy’s had charged customers significantly higher prices for the hand sanitisers compared to other retailers during March 2020.
Samy’s concluded a settlement agreement with the Commission in terms of which it agreed, inter alia, to desist from excessive pricing conduct, reduce its mark-up on hand sanitisers to an agreed maximum percentage for the duration of the national disaster, and to donate hand sanitisers to the value of ZAR 4 000 (being the value of the overcharge) to four identified non-profit organisations.
As discussed in an earlier newsflash (accessible here), the Tribunal recently found Babelegi Workwear and Industrial Supplies CC guilty of excessive pricing pursuant to the COVID-19 crisis and ordered Babelegi to pay an administrative penalty in the amount of ZAR 76 040.