The Competition Commission has slammed Dis-Chem’s argument that the retailer increased its face mask prices in March in line with other competitors.
The retailer, which is being prosecuted for price gouging, said it was forced to increase prices of surgical masks because of disruption in supply as well as some suppliers quoting prices up to 40 times higher than the normal price in February.
Dis-Chem’s lawyer, Michelle le Roux, said while the retailer increased the price of its five- and 50-pack surgical masks, the prices were still lower than those of its competitors.
But the Commission, which referred Dis-Chem’s case to the Competition Tribunal, said the retailer started hiking its prices for face masks in February, well ahead of competitors, and before the procurement costs for this essential item went up.
“If everyone is watching everyone else, how can we take much comfort that if the other competitor has increased in response, that is now the competitive price?” asked the Competition Commission’s chief economist James Hodge.
Dis-Chem’s economic expert, Patrick Smith, said March prices, which have since come down, were informed by the quotes the retailer was getting from suppliers. He added that while the retailers’ profit margin for masks was “substantially higher” in March, it has since “collapsed” to a single digit.
The Competition Tribunal will now have to deliver its verdict on whether Dis-Chem was indeed guilty of price gouging, as the hearing wrapped up on Wednesday.
While the Tribunal did not announce the date of its ruling, the Commissioner, Yasmin Carrim, said that the case is of national importance and there is a great deal of pressure to prosecute inexplicable excessive pricing.