Dis-Chem withdraws inflated price fine appeal
DIS-CHEM on Friday instructed its legal team to withdraw its appeal against the Competition Tribunal’s R1.2 million fine for inflating the price of surgical masks, saying it would rather focus on meeting its customers’ needs.
In July, the tribunal slapped the pharmacy chain with a R1.2m fine, or 10 percent of its turnover, after finding that it had contravened the Competition Act by charging an excessive price for three types of surgical mask, to the detriment of consumers in March.
The group had said it would appeal the matter, as the decision seemed to contain a number of errors of fact and law.
However, on Friday, Dis-Chem said its decision came amid the justifiable anger at procurement abuses during the provision of personal protective equipment at taxpayers’ expense that had been recently exposed.
Dis-Chem said it was not involved in any of these scandals and, together with the rest of the country, was upset at these developments and the ongoing appeal on entirely different legal issues could taint its reputation by misplaced association.
Dis-Chem chief executive Ivan Saltzman said the group remained confident that it neither overcharged nor broke the law.
“We believe that our price adjustments during March 2020 were justified, given the increased costs we were facing and our commitment to ensure stock availability,” Saltzman said.
He said that in April Dis-Chem had reduced its mask prices when its costs started to reduce, even before the Competition Commission began its investigation.
“As such, we believe that we would have succeeded on appeal,” he said. “However, we would rather move forward and focus on delivering value to consumers for the products they need, especially during the continued challenging environment,” Saltzman said.
The commission said it had received complaints from the public at the end of March about several retail stores owned by Dis-Chem for engaging in excessive pricing of masks.
Competition Commissioner Tembinkosi Bonakele welcomed the withdrawal, saying the price increases that occurred during the state of the national disaster were regrettable.
“We believe that the tribunal made a right call by condemning the conduct. We have been consistent in arguing that price gouging in a pandemic deprives consumers, particularly poor consumers, of access to essential goods that are necessary to prevent a further escalation of the pandemic,” said Bonakele.
The commission’s probe established that “50PC blue surgical face masks”, “5PC surgical face masks” and “folio-dress blue surgical face masks” sold at far lower prices before the declared state of disaster.