A Gauteng hardware store found to have charged excessive
prices for surgical gloves during the coronavirus outbreak has been ordered to
refund its customers for the overcharge.
Johannesburg-based Main Hardware must also reduce its mark-up
on surgical gloves to 10% for the remainder of the pandemic period and for six
months after that, the Competition Tribunal said on Friday.
Main Hardware was referred to the Tribunal after the
Competition Commission launched a probe into the store based on a tip-off that
it was allegedly charging excessive prices.
According to the Commission, it found that Main Hardware had
ordered extra supplies of surgical gloves after the announcement of the state
of national disaster and added an “unreasonable” markup in March
2020, which the Commission said amounted to an abuse of dominance.
In terms of a settlement between the Tribunal and Main
Hardware, the store will have to immediately stop price gouging; reduce its markup
and cap it at 10%; and all customers who were overcharged must be refunded for
the higher price. If they can’t be traced, the refundable amount will be
donated to the Solidarity Fund.
This is the second consent agreement relating to price
gouging that the Tribunal has confirmed. On Monday, it ordered a Boksburg
pharmacy to donate over R25 000 worth of hand sanitisers, surgical gloves and
face masks to two old age homes in its area.
This was after the Competition Commission found it had
overcharged for face masks.
The Competition Commission has vowed to crack down on excessive
pricing on essential products during the coronavirus pandemic, with Competition
Commissioner saying no effort would be spared to protect consumers against exploitative
Shortly before the lockdown, government gazetted regulations
aimed at preventing price gouging, announcing strict regulations governing
pricing on essential prices. Companies were warned not to hike prices on
specific goods by more than the increases in the cost to produce these
products, or to above the average mark-ups during the three months to 1 March 2020.
The list of products included toilet paper, hand sanitiser,
face masks, surgical gloves, antiseptic liquids, all-purpose cleaner, surgical
masks, and various staple foods.
On Thursday, Fin24 reported that Dis-Chem
had been charged for excessive pricing on some face masks. The Competition
Commission called on the Tribunal to impose the maximum penalty.