By Thato Mahlangu
More than 25 retailers have been found guilty of price inflation during the national COVID-19 outbreak after consumers complained about the corrupt practices to competition and consumer watchdogs.
These retailers are also investigated for potential collusive behaviour which may have a negative impact on consumers and those businesses which are trading fairly.
The Department of Trade and Industry and the Consumer and Competition Commissions said, on 24 March 2020, 30 retailers have been found to have been abusing the current situation after an investigation into the allegations was conducted.
These retailers are said to have been taking advantage of unsuspecting consumers by selling products meant to help minimise the spread of COVID-19 at high prices. Of the 30, 11 are investigated by the Competition Commission while 19 are investigated by the consumer watchdog.
The department and the two regulators said that more retailers will be investigated and prosecuted for fixing prices for essential products.
These include basic food items like rice, maize meal, and milk, personal care products like toilet paper and baby formula, hygiene products like hand sanitiser and cleaning agents, and key medical supplies like surgical masks and gloves. In addition, both regulators have published a list that showed 22 critical products and categories which they will be monitoring closely to ensure that there are no unjustified price increases during the national lockdown, in force since 27 March 2020.
The Competition Act prohibits irregular and unethical price increases and collusive behaviour by suppliers and retailers, which are aimed at exploiting consumers.
“The penalties for such offences are severe, including a 10% of the firm’s annual turnover for a first-time offence and 25% of annual turnover for a repeat offence. For collusive behaviour, the directors of companies which engage in such acts face potential imprisonment for a period of up to 10 years.”
The National Consumer Commission has established a toll-free hotline on 0800 014 880) and is also reachable on social media through Twitter @NCC_COVID19.
“Consumers can report unjustified price increases on any of these 22 products and other key products to the National Consumer Commission, and we encourage you to do,” the Consumer Commission said.
Acting Consumer Commissioner Thezi Mabuza told the SA News site that a fine of up to R1-million or up to 10% of a retailer’s annual turnover or even imprisonment for a period not exceeding 12 months will be imposed to a company/retailer found guilty of inflating prices.
More punishment for corrupt business people
The KwaZulu-Natal (KZN) government said on 27 March that it intends terminating contracts of Spar franchise owners who have been found to have inflated prices.
“I wish to report to the people of KwaZulu-Natal that my department is in negotiations with Spar KZN Management with the view of terminating contracts of franchise owners and managers who are involved in price hiking,” said KZN Economic Development, Tourism and Environmental Affairs MEC Nomusa Dube-Ncube.
Dube-Ncube said the termination of the contracts will strengthen government’s zero-tolerance policy towards price gougers.
“We are aware as the department that there are currently over 900 independently owned Spar stores in the country with hundreds located throughout KwaZulu-Natal. And importantly, we welcome the fact that the holding company has strict regulations that are aimed at ensuring Spar’s positive brand image,” she said.