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Date of release: 15 May 2020
TRIBUNAL CONFIRMS FOUR CONSENT AGREEMENTS RELATING TO COVID-19 EXCESSIVE PRICING COMPLAINTS
 
The Competition Tribunal has confirmed four consent agreements -- relating to COVID-19 excessive pricing complaints – concluded between the Commission and various companies.
 
All relate to alleged excessive pricing of goods seen as essential in the context of the COVID-19 pandemic i.e. hand sanitisers and face masks – a contravention of the Competition Act (i.e. excessive pricing) read with the Consumer Protection Regulations. This brings the total number of agreements, approved in recent weeks as orders of the Tribunal, to 11.
 
The Commission concluded the consent agreements with the companies after receiving and investigating complaints from the public. The following are summaries of the latest confirmed consent agreements:
 
Domoney Brothers Bloemfontein (Pty) Ltd (Domoney)
 
Domoney, a Bloemfontein-based supplier that on-sells face masks to customers, is accused by the Commission of marking up the price of its dust masks by 56% in February 2020 and 262% in March 2020. The Commission found that this was a contravention of the Act read with the Regulations.
 
In its agreement with the Commission, Domoney has undertaken to contribute R30 040 to the Solidarity Fund. It will also donate face shields worth R30 040 to the Carel du Toit School for the Deaf, the Universitas Hospital and the Pelonomi Academic Hospital in Bloemfontein.
 
The company has also agreed to immediately desist from excessive pricing conduct and to reduce its mark-up on dust masks to an agreed maximum for the duration of the state of national disaster.
 
Sanua CC t/a Naturally Yours Weleda Pharmacies (Weleda Pharmacies)
 
This matter relates to Weleda Pharmacies which operates in the Bryanston and Fourways areas.
 
The Commission found that the average cost mark-up of approximately 50% and gross profit margin of 33.33% in respect of 500ml hand sanitisers for March 2020 is high and possibly a contravention of the Act read with the Regulations.
 
Among others, Weleda Pharmacies has undertaken to donate R18 750 to the Solidarity Fund and to reduce its gross profit margin on the sale of hand sanitisers to an agreed maximum for the duration of the state of national disaster.
 
Retrospective Trading 199 CC t/a Merlot Pharmacy (Merlot Pharmacy)
 
Merlot Pharmacy is based in Table View, in the Western Cape.
 
According to the Commission, its average cost mark-up on hand sanitisers and facial masks in March and April 2020 may amount to a contravention of the Competition Act and the Consumer Protection Regulations. In its consent agreement with the Commission, Merlot Pharmacy has undertaken to, among others:
 
  • donate an amount of R16 832 to the Solidarity Fund; and
  • reduce its gross profit margin on facial masks and hand sanitisers to an agreed maximum with immediate effect for the duration of the state of national disaster.
 
Retrospective Trading 200 CC t/a Seaside Pharmacy (Seaside Pharmacy)
 
The Commission found that Seaside Pharmacy’s average cost mark-up of 63.04% and gross profit margin of 38.67% in respect of hand sanitisers and average cost mark-up of 44.95% and gross profit margin of 31% in respect of face mask in March and April 2020 may amount to a contravention of the Competition Act and its relevant regulations.
 
Based in Table View in the Western Cape, Seaside Pharmacy has agreed to donate R4 168.00 to the Solidarity Fund, to immediately reduce its gross profit margin on face masks and hand sanitisers to an agreed maximum for the duration of the state of national disaster and to immediately desist from excessive pricing conduct as described in the consent agreement.
 

**Background notes for editors/journalists
 
Consent agreements offer parties to alleged anti-competitive conduct the opportunity to settle their matter with the Competition Commission by agreement. A consent agreement must be confirmed as an order of the Tribunal for it to be legally enforceable.
 
The 11 consent agreements, confirmed as orders of the Tribunal since 20 April 2020, relate to the alleged excessive pricing of essential goods i.e. hand sanitizers, face masks or surgical gloves in the context of the COVID-19 pandemic.
 
Two separate Tribunal hearings have also been held in which companies accused of excessive pricing (Babelegi Workwear and Industrial Supplies and Dis-chem) have contested the Commission’s excessive pricing cases against them.
 
The Tribunal has heard oral arguments in the two contested matters. Proceedings were heard through video conferencing in line with the Tribunal’s COVID-19 directives. The Tribunal’s decisions in these two matters will be handed down in due course.
 
Issued by:

Gillian de Gouveia, Communications Officer
On behalf of the Competition Tribunal of South Africa
Tel: +27 (0) 12 394 1383
Cell: +27 (0) 82 410 1195
E-Mail: GillianD@comptrib.co.za
Twitter: @comptrib
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Our mailing address is:
ctsa@comptrib.co.za

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