Dis-Chem found guilty of price gouging on face masks
The company was found to have contravened the Competition Act after it increased prices for three types of masks
The Competition Tribunal has found Dis-Chem guilty of charging excessive prices for surgical face masks to take advantage of heightened demand during the Covid-19 pandemic, and has ordered it to pay R1.2m.
The company was found to have contravened the Competition Act after it increased prices for three types of masks “to the detriment of consumers during March 2020”.
The tribunal said it would make available its reasons “in due course”.
The company “exerted market power” by increasing prices as the pandemic worsened globally, with one increase happening on the day that SA had reported its first case.
“We find that in the context of a global health crisis, with excess demand [for] surgical masks, considered to be essential in the fight against Covid-19, Dis-Chem has demonstrated that it enjoyed and exerted market power by materially increasing its prices, without a significant increase in costs, and significant increase in margins,” the tribunal said in a ruling sent by e-mail on Tuesday.
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