Dis-Chem charged for price gouging on face masks during coronavirus outbreak

The Competition Commission has referred pharmaceutical retailer Dis-Chem to the Competition Tribunal for prosecution for excessive pricing during the coronavirus outbreak, it said in a statement on Wednesday.

From the end of March, the Commission received “several complaints from the public against several retail stores owned by Dis-Chem for engaging in excessive pricing of face masks, specifically dusk and surgical masks,” it said.

The referral followed an investigation by the Commission which found that Dis-Chem charged “excessive prices” on essential hygienic goods, which disadvantaged customers and consumers.

The probe established that prior to the declaration of a national state of disaster, Dis-Chem was selling the three types of masks, namely, surgical face masks blue 50PC, surgical face masks 5PC and surgical face masks foliodress blue, at far lower prices.

Surgical face mask blue 50PC had been increased by 261{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} from R43.47 for a unit containing 50 masks in February to R156.95 per unit of 50 masks in March, according to the Commission.

The surgical face masks 5PC, on the other hand, were inflated by 43{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2}. In February a unit was sold for R13.27 and was increased to R19.03 in March. These increased inflated the wholesaler’s gross margin from 20{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} in February to 45{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} in March. 

The Competition Commission previously vowed to crack down on excessive pricing on essential products during the state of national disaster. Government gazetted regulations aimed at preventing price gouging during the crisis. The restrictions applied to numerous products, including hand sanitisers, toilet paper, face masks, surgical masks, disinfectant wipes and others.

“People who sell these essential products ought to appreciate that these are literally life saving items right now. They shouldn’t be exploitative and take advantage of cash strapped consumers during the worst time in our history. We will spare no effort in protecting the consumer,” said Competition Commissioner Bonakele.

The Commission asked the Tribunal to impose a maximum penalty against Dis-Chem.