Facial masks: 888% price gouging case to be heard

A PRETORIA company that has been accused of selling facial masks at an 888% increase in price has become the first case of price gouging during the national disaster brought before the Competition Tribunal for prosecution.

Facial masks fall under the category of medical and hygiene supplies and have been identified as essential goods for curbing the spread of the Covid-19 pandemic.

Sipho Ngwema, head of communication at the commission, said: “The Competition Commission has moved swiftly against companies accused of inflating prices of essential goods following the advent of the Covid-19 national disaster.

“The case of excessive pricing is against Babelegi Workwear Overall Manufacturers & Industrial Supplies CC (Babelegi).

“The commission investigated the complaints and found that during the period January 31 to March 5 this year, Babelegi increased its prices of facial masks from R41 a box up to the highest price of R500 a box, earning during this period mark-ups in excess of 500%.”

The commission further found that Babelegi’s prices for facial masks increased by at least 888% when comparing the prices charged in December 9, 2019.

Mark-ups (and not prices) significantly dropped after March 18, allegedly after the supplier increased input prices.

The supplier is now also under investigation for excessive pricing.

The commission has been inundated with hundreds of complaints from consumers about prices of certain essential goods and other basic food items that have suddenly rocketed

Other matters that have been concluded, but are yet to be referred to the tribunal, include the following: An investigation of a hardware store that allegedly increased the price of surgical gloves over a period of a week from R99.99 to R170, with no cost increase justifications; a pharmacy that earned a more than 300% mark-up on face masks and hand sanitiser; a wholesaler of chicken that increased mark-ups for chicken pieces by up to 50%, with no cost increase justifications, and a supplier of face masks that earned over 665% mark-ups.

Commissioner of the Competition Commission, Tembinkosi Bonakele, said: “The Commission has now gone past the stage of moral persuasion and appeals to patriotism to stop abuse of market power by those seeking to exploit consumers at the worse possible time.

“The law must take its course. We will see a wave of prosecutions of firms in the coming days.”

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Prices of facial masks increased from R41 a box to R500 a box Sipho Ngwema COMPETITION COMMISSION