More companies under suspicion of over-pricing basic products
TRADE, Industry and Competition Minister Ebrahim Patel said yesterday South Africa’s anti-trust organisations were investigating more companies for over-pricing basic products, including maize meal and hand sanitisers, amid the panic caused by the spread of Covid-19.
Patel told a media briefing in Pretoria that if found guilty, the companies could face a hefty penalty of up to 10 percent of annual turnover.
He said there had been complaints about individuals and firms increasing prices unjustifiably.
“The Competition Commission of South Africa and the National Consumer Commission met yesterday (Monday) and are now investigating 11 firms who have been found to be selling products, like hand sanitisers and face masks and other products, for high prices and abusing the situation,” Patel said. “More firms are now being investigated and prosecution will follow.”
Last week, the Department of Trade and Industry published a list of 22 products that were monitored closely by the consumer and competition commissions to ensure that there were no unjustified price hikes.
The list comprises basic foods, including rice, milk, maize meal, canned vegetables, and hygiene products, including disinfectants, hand sanitisers, cleaning agents, gloves and surgical masks.
Patel said the government had introduced competition exemptions for banks to work together to support businesses and ordinary account holders during the 21-day lockdown that was announced by President Cyril Ramaphosa on Monday.
“The exemptions will allow banks to work together to devise programmes and relief measures which can help small businesses and consumers as well as firms in distress through these financial and economic challenges,” he said.
“In particular, the exemptions will help banks co-ordinate on matters such as payment holidays and debt relief for citizens and businesses in financial distress.”
Patel said the measures would ensure limitations on asset repossessions and co-ordinate additional credit lines for businesses under financial stress.
He also said the exemption would see banks sharing information on resources to ensure the continued availability of banknotes at ATMs.
“We have taken extraordinary measures to ensure that the banking sector is strong, so that citizens can access banks in the next three weeks.”
Interventions to mitigate the impact of the 21-day lockdown on the economy included a R3 billion package put together by the Industrial Development Corporation and the Department of Trade and Industry towards industrial funding to aid vulnerable firms and to fast-track funding for companies that are critical to government’s efforts to fight the virus and its economic impact.
Patel said that the fund would be available to South African-owned businesses, and included R500 million that would be allocated for trade finance to import essential medical products and a R700m facility for working capital, machinery, and equipment.
“We are also addressing surges in demand to ensure food security and provide support for supply chains that are interrupted by large companies closing down,” Patel said.