Consumer watchdog warns of R1m fines for price gouging during disaster
The National Consumer Commission (NCC) has warned suppliers to not inflate prices of “essential” items that are listed under the consumer and customer protection and national disaster management regulations.
The NCC said a supplier or person found to be in contravention of the regulations could be fined up to R1m, fined up to 10% of a firm’s annual turnover, or be jailed for up to a year.
“This comes after reports of possible food shortages in both KwaZulu-Natal and Gauteng after public unrest,” said the NCC in a statement.
“Regulation 350 read with sections 40 and 48 was gazetted by government to prevent suppliers from profiteering during a national disaster. This was done to protect consumers against unfair, unreasonable or unjust pricing.”
The NCC said it was unreasonable and unfair for suppliers of goods to take advantage of a disaster by inflating the prices of goods without any economic justification.
Acting consumer commissioner Thezi Mabuza said sections 40 and 48 of the Consumer Protection Act (CPA) prohibit a supplier from increasing their prices “unconscionably”.
“Section 48 states that a supplier must not offer to supply or enter into an agreement to supply goods and services at a price that is unfair or unconscionable. Unfair, unreasonable or unjust pricing (price gouging) is when a supplier increases prices of goods or services that do not correspond to or are not equivalent to the increase of providing that service or good,” she said.
The items suppliers are not allowed to inflate prices of basic food and consumer items, emergency products and services, medical and hygiene supplies, and emergency cleanup products and services.
“The NCC will continue implementing the provisions of the CPA by reducing and ameliorating any disadvantages experienced in accessing any supply of goods or services by consumers,” Mabuza said.
She encouraged consumers to monitor the market and report any suspicious unfair price increases of these goods and services.