Company accused of overcharging for sanitisers pays R500,000 no-fault fine

The latest settlement agreements bring to 23 the number of agreements that have been confirmed as orders of the Competition Tribunal since April.
The latest settlement agreements bring to 23 the number of agreements that have been confirmed as orders of the Competition Tribunal since April.
Image: AFP/ PHILIP FONG

The Competition Tribunal has confirmed three settlement agreements in relation to companies accused of charging excessive prices for hand sanitisers and face masks during the Covid-19 pandemic.

The latest settlement agreements bring to 23 the number of agreements that have been confirmed as orders of the Competition Tribunal since April.

In the latest case, Caprichem has agreed to pay a R500,000 fine after it was accused by the Competition Commission of charging excessive prices for hand sanitisers.

In terms of its settlement with the commission, Caprichem also undertook to donate R100,000 to the Solidarity Fund.

In addition, the manufacturer and supplier of chemicals in Cape Town agreed that its gross profit margin on 5-litre hand sanitisers will not exceed an agreed to maximum percentage for the duration of the national state of disaster.

The commission alleged Caprichem charged excessive prices for its 5-litre variant of hand sanitisers from March 16. Caprichem did not admit to any contravention.

According to the settlement agreement, Caprichem is entering into the agreement “in order to avoid protracted litigation, and nothing in the agreement should be construed as an admission of liability."

The commission received a complaint at the end of March alleging Caprichem had increased its price for 5-litre of hand sanitiser from R262 to R527, inclusive of VAT, during the national state of disaster and lockdown.

Another company, West Coast Hardware, agreed to donate R6,000 to the Solidarity Fund after the commission accused it of excessively pricing face masks.

West Coast Hardware did not admit its conduct contravened the Competition Act.

Another agreement was reached between the commission and Farpoint Trading 31 CC, trading as Mica Durban North, for excessive pricing of hand sanitisers.

Following an investigation, the commission found Mica Durban North’s average gross profit margin during March 2020 and April 2020 in respect of hand sanitisers was in contravention of the Competition Act.

Mica Durban North did not admit its conduct amounted to excessive pricing. However, it agreed to resolve the matter by, among others, reducing its gross profit margin on hand sanitisers to an agreed maximum percentage with immediate effect.


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