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Date of release: 22 May 2020
TRIBUNAL CONFIRMS A CONSENT AGREEMENT
WHEREBY TWO FACE MASK SUPPLIERS JOINTLY PAY R1.5M FINE
 
The Competition Tribunal has approved a consent agreement -- relating to alleged excessive pricing of face masks in the context of COVID-19 – whereby two related companies will jointly pay an administrative penalty of R1 500 000 (one million five hundred thousand Rand).
 
Sicuro Safety CC (Sicuro) and Hennox 638 CC t/a Hennox Supplies (Hennox) have also undertaken to jointly and severally contribute R200 000 (two hundred thousand rand) to the Solidarity Fund for the fight against the COVID-19 pandemic.
 
The Competition Commission, which investigated the companies after receiving complaints, found that Sicuro and Hennox had increased their prices of face masks by 969.07% and 956% respectively between December 2019 and March 2020 without corresponding increases to their costs. Hennox imports face masks while Sicuro purchases face masks from Hennox and on-sells them to customers.
 
Sicuro and Hennox, which are based in Boksburg, Gauteng, admit to increasing their gross profit margins for FPP1 face masks during March 2020, in contravention of section 8(1)(a) of the Competition Act read together with Regulation 4 of the Consumer Protection Regulations  which prohibits excessive pricing.
 
In terms of the consent agreement, Sicuro and Hennox have also agreed to:
  • immediately desist from excessive pricing conduct;
  • reduce their gross profit margin on FFP1 face masks to an agreed upon maximum percentage;
  • ensure their gross profit margin for FFP2 and FFP3 face masks will not exceed an agreed upon maximum percentage; and
  • develop, implement and monitor a competition law compliance programme.
To date, a total of 12 consent agreements relating to excessive pricing complaints in the context of COVID-19 have been confirmed as orders by the Tribunal. This number includes the abovementioned agreement.
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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