Competition Tribunal nails mask producer for exploiting Covid-19

The Competition Tribunal has found a South African business guilty of excessive pricing and contravening the Competition Act in the supply of protective facial masks.

The case was referred to the tribunal by the Competition Commission, which investigates cases of collusive of noncompetitive business practices. 

Babelegi Workwear and Industrial Supplies CC was found by the tribunal to be in contravention of section 8 of the Competition Act, after it increased its prices for facial masks from R41 per box to the high of R500 per box, earning mark-ups in excess of 500{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2}. 

The tribunal also found that Babelegi’s prices for facial masks increased by at least 888{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} when comparing the prices charged in December of 2019 to the prices charged in March of 2020. Babelegi was fined R76 040. 

“Babelegi has not put up a rational and valid explanation for its successive and massive price increases that are not substantiated by any corresponding increase in cost.

“As is clear from its pricing conduct, Babelegi exploited this crisis situation, when it successively and massively increases both its prices and mark-ups for masks during the complaint period,” the tribunal said in a statement.

The tribunal concluded that the Commission established a prima facie case of an abuse of dominance because Babelegi charged excessive prices for masks.

READ | Competition Commission still seeing price hikes up to 900{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} during coronavirus outbreak

Earlier this month, Competition Commissioner Thembinkosi Bonakele told Parliament that while 13 settlements worth R12 million had seen secured from companies for noncompetitive behaviour and pricing in the wake of the Covid-19 pandemic, prosecutions were still pending for price increases as high as 900{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2}.

“The complaints we received relate to the allegations that retailers, traders, suppliers and pharmacies are charging excessive prices for Covid-19 related products including masks and sanitisers, protective gear, and certain essential goods and basic food items,” said Bonakel

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