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TRIBUNAL APPROVES FIRST CONSENT AGREEMENT
RELATING TO COVID-19 EXCESSIVE PRICING
Gauteng pharmacy charging excessive prices for face masks during state of national disaster, must donate essential goods to two old aged homes
A Boksburg pharmacy in Gauteng must donate hand sanitizers, surgical gloves and face masks -- valued at R25 410.00 -- to two old aged homes in its area of business after the Competition Commission (Commission) found it to be charging excessive prices for face masks during South Africa’s state of national disaster and COVID-19 lockdown period.
The pharmacy furthermore agreed to significantly reduce its mark-up on facial masks with immediate effect for the duration of the state of national disaster.
This arrangement forms part of a consent agreement between the Commission and Cilliers and Heunis CC, trading as Centrum Pharmacy. The agreement has been confirmed as an Order of the Competition Tribunal as of Monday, 20 April 2020.
In terms of the agreement, Centrum Pharmacy will:
- immediately desist from the excessive pricing conduct;
- reduce its mark-up on facial masks to significantly below that which it conventionally levies on other non-pharmaceutical store items with immediate effect for the duration of the state of national disaster;
- donate the following essential goods amounting to a total value of R25 410.00 to two old aged homes situated in Boksburg, namely:
- 500 hand sanitizers (100ml each)
- 320 items of 3 ply face masks
- 7 boxes of gloves (one box contains 100 gloves each)
Background
After receiving information, the Commission investigated Centrum Pharmacy’s alleged conduct and found, among others, that the pharmacy’s average mark-up in respect of facial masks for March 2020 was in excess of 100%, which is significantly above its average mark-up on “non-essential” products that it has maintained over time.
Centrum Pharmacy did not sell facial masks before March 2020. It sourced masks from various suppliers due to the sudden demand and panic-buying brought on by the state of national disaster.
The Commission found that Centrum Pharmacy’s prices charged for facial masks during March 2020 is a contravention of the Competition Act (excessive pricing) and the Consumer Protection Regulations.
The Commission specifically had regard to Centrum Pharmacy’s average mark-up in respect of facial masks for March 2020 compared to its average mark-up on “non-essential” products that it has maintained over time.
The agreement has been confirmed as an Order of the Competition Tribunal in terms of the Competition Act in respect of a contravention of section 8(1)(a) of the Act read together with Regulation 4 of the Consumer And Customer Protection and National Disaster Management Regulations and Directions published in Government Gazette No 43116 on 19 March 2020, as well as the Regulations on Competition Tribunal Rules for COVID-19 Excessive Pricing Complaint Referrals published in Government Gazette No 43205 on 3 April 2020 and the Tribunal Directive for Covid-19 Excessive Pricing Complaint Referrals.
Facial masks fall under the category of ‘medical and hygiene supplies’ in the Consumer Protection Regulations.
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