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Cape Town company agrees to pay R600,000 for over-charging for sanitisers

Cape Town-based company Caprichem has agreed to pay R600,000 for overcharging consumers for sanitisers.
Cape Town-based company Caprichem has agreed to pay R600,000 for overcharging consumers for sanitisers.
Image: AFP/ PHILIP FONG

Caprichem, a Cape Town-based company, has agreed to pay a R500,000 penalty and R100,000 contribution to the Solidarity Fund for charging excessive prices for sanitisers.

The Competition Commission said it had applied to the Competition Tribunal for an order confirming the settlement agreement the commission had reached with the company.

“On Thursday, May 28 2020, the commission referred a complaint against Caprichem for excessive pricing of 5l hand sanitisers to the detriment of customers and consumers. In terms of the settlement, Caprichem will pay an administrative penalty of R500,000.

“Furthermore, Caprichem has undertaken to pay a contribution of R100,000 to the Solidarity Fund,” the commission said in a statement.

Caprichem, the commission said, had agreed to reduce its gross profit margin on 5l hand sanitisers for the duration of the state of the national disaster.

“The settlement follows the commission’s investigation which found that the Caprichem increased its prices of a 5l hand sanitiser from R262 to R527 (including VAT) during the period March 16 to date; representing an increase in gross profit margin of 91% and a 1,918% increase in net profit margin.

“This amounted to the total value of R548,422.96 of unduly earned profit,” the commission said.

The commission said it had, since the outbreak  of Covid-19, received more than 1,556 complaints or tip-offs related to excessive pricing of basic food products, masks and sanitisers.

Of the 1,556 complaints received, 791 were Covid-19 related cases while 325 were referred for further investigations or prosecution. Most of the complaints were from Gauteng, the commission said.

“To date, the commission has referred and settled 18 Covid-19 related cases to the total value of R12,854,694, of which R5,316,990 has been donated to the Solidarity Fund. 

“The commission has encouraged firms to reach settlements to speed up the processing of excessive pricing cases. In most settlements, firms had undertaken to correct prices/margins and make a donation to a public interest organisation or the Solidarity Fund.”


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