Competition Commission charges Dis-Chem for inflating prices during lockdown

Image credit: LinkedIn/Dis-Chem

The Commission Commission has referred Dis-Chem Pharmacies to the Competition Tribunal for “excessive pricing” during the COVID-19 state of national disaster.

In a statement on Thursday, the Commission said after an investigation, Dis-Chem was found to have charged consumers excessive prices on essential hygienic goods.

These goods include surgical face masks blue 50PC, surgical face masks 5PC and surgical face masks foliodress blue, all of which Dis-Chem was selling “at far lower prices” prior to the state of national disaster, the Commission said.

‘Maximum punishment’

The Commission said, “For surgical face mask blue 50PC, the average price was inflated from R43.47 (excl VAT) per unit (50 masks) in February 2020 to R156.95 (excl VAT) per unit (50 masks) in March 2020, a price increase of 261%.

“For surgical face masks 5PC, the average price increased from R13.27 (excl VAT) per unit (5 masks) in February 2020 to R19.03 (excl VAT) per unit (5 masks) in March 2020, a price increase of 43%.”

According to the Commission, Dis-Chem’s gross profit margin for surgical face masks foliodress blue increased from 20% in February 2020 to 45% in March 2020 despite its input costs remaining the same.

The regulator asked the Tribunal to impose the maximum punishment on Dis-Chem for the inflations.

‘We’ll protect the consumer’

Competition Commissioner Tembinkosi Bonakele said, “People who sell these essential products ought to appreciate that these are literally life-saving items right now.

“They shouldn’t be exploitative and take advantage of cash strapped consumers during the worst time in our history. We will spare no effort in protecting the consumer.”

Dis-Chem has not yet publicly reacted to the referral and it is unclear at this stage what penalty it could face.

Earlier this week, the Tribunal announced that it had concluded a consent agreement with Centrum Pharmacy, which operates in Boksburg, Gauteng, after it was similarly charged for excessive pricing.

Under the agreement, Centrum Pharmacy will donate hand sanitisers, surgical gloves and face masks valued at R25,410 to two old age homes in its area of business.

“The pharmacy furthermore agreed to significantly reduce its mark-up on facial masks with immediate effect for the duration of the state of national disaster,” the Tribunal said.

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