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Big and small companies hike up prices to cash in on coronavirus

Empty shelves in a store where the alcohol-based hand sanitisers have been sold out. / Gallo Images/ ER Lombard
Empty shelves in a store where the alcohol-based hand sanitisers have been sold out. / Gallo Images/ ER Lombard

There have been hundreds of cases of unfair price increases during the national lockdown, with some essential items seeing sudden increases amounting to more than 10 times the usual price.

On Monday, Centrum pharmacy in Boksburg, Ekurhuleni, was ordered to donate hand sanitisers, surgical gloves and face masks valued at R25,410 to two old age homes in the area after the Competition Commission found it to be charging excessive prices for face masks during the ongoing Covid-19 lockdown period.

The pharmacy has also been told to reduce the prices of its masks but no percentage or fixed price was given.

This was the Competition Tribunal's first consent agreement relating to excessive pricing during the lockdown.

The Competition Commission, which has been flooded with more than 800 complaints, found 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 other "nonessential" products that it has maintained over time.

The complaints which the commission is handling are mostly on the prices for essential hygienic products such as sanitisers, surgical masks and facial masks.

However, the commission's spokesperson Sipho Ngwema said there were increasing complaints on pricing of basic foods.

"We have also noted a new wave of steadily rising complaints on basic food stuffs like eggs, milk, chicken etc.

"These investigations include almost all shapes and types of enterprises - manufacturers, suppliers, spaza, corner shops, local pharmacies, big retailers."

Ngwema said they have received complaints about inflation of prices of products on the shelves of many retailers, with some of them being national franchises, and that some of their investigations were close to completion.

"Given the size of national grocery retailers, those investigations take long. Notwithstanding that, we shall be referring for prosecution the first big retailer tomorrow (today)."

Ngwema refused to name the retailer but said: "We have seen hikes as big as 500% or 1,000%. We have issued more than 200 cease and desist cautionary letters."

The ombudsman for consumer goods and services Magauta Mphahlele told Sowetan complaints relating to the travel services sector had skyrocketed from 15 last month to 57 as of yesterday, April 21.

"We anticipate that after the lockdown we will see higher numbers as consumers return to work.

"The lockdown has affected the response to complaints because most of the entities complained against are not operational and as a result we cannot report on the outcome of these complaints as yet," Mphahlele said.

Trade and industry minister Ebrahim Patel announced last month that government would be cracking the whip over price manipulation, unfair increases in the cost of basic goods and anti-competitive behavior with the National Consumer Commission (NCC) and the Competition Commission tasked to look into this matter.

Ngwema said they have instituted a joint task team with the NCC to handle all Covid-19 related excessive pricing and price gouging.

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