DTI effects regulations for healthcare sector, retailers in light of Covid-19

20th March 2020 By: Tasneem Bulbulia - Creamer Media Reporter

Trade and Industry Minister Ebrahim Patel, after consultation with the Competition Commission, and in terms of the Competition Act, has published regulations for Covid-19 exemption for the healthcare sector.

The regulations will come into effect on the date of publication in the Government Gazette.

The purpose of these regulation is to exempt a category of agreements or practices in the healthcare sector from the application of Sections 4 and 5 of the Act in response to the declaration of the Covid-19 pandemic as a national disaster in terms of the Disaster Management Act.

This is for the purpose of promoting concerted conduct to prevent an escalation of the national disaster and to alleviate, contain and minimise the effects of the national disaster; and to promote access to healthcare, prevent exploitation of patients, enable the sharing of healthcare facilities, manage capacity and reduce prices.

Patel has exempted the following categories of agreements or practices in the healthcare sector from the application of sections 4 and 5 of the Act if undertaken at the request of, and in coordination with, the Department of Health for the sole purpose of responding to the Covid-19 pandemic and which exclude communication and agreements in respect of prices unless specifically authorised by the Health Minister.

This encompasses agreements or practices between hospitals and healthcare facilities; medical suppliers; medical specialists and radiologists; pathologists and laboratories; pharmacies; and healthcare funders. 

“Today, we published a regulation that deals with the health sector, and it will permit private healthcare providers to coordinate their actions as part of the Department of Health’s efforts, including sharing of facilities and beds, medical supplies, nurses and doctors between different companies and with government,” Patel said in a statement.

Any discussion and/or agreement on pricing between private healthcare companies or providers must be specifically authorised by the Health Minister.

Owing to the unpredictability of the pandemic, the areas of collaboration exempted in these regulations may be expanded or reduced by Patel by notice published in the Government Gazette in terms of these regulations.

To the extent that the healthcare sector identified additional agreement or practices outside the scope of paragraphs, 3, 4, and 5 that are necessary to achieve the purpose of these regulations, the sector may request Patel to expand the scope of this exemption.

RETAIL MEASURES

Patel also indicated that the department was working with retailers and large food producers to ensure that the supply-chain remains strong and that basic goods are available to consumers.

He indicated that factories have reported that their production is stable and farmers have promised a bumper maize crop.

“We saw a spike in stockpiling earlier this week in some retail outlets that has tapered off somewhat yesterday. At the same time, there is anecdotal evidence of price spikes in areas such as face masks and hand-sanitisers.

“We are appreciative that the vast majority of South Africans have not rushed to the stores and have remained calm.”

He indicated that, through working with retailers in the past few days, all major retailers have now put limits on at least some products in their stores, which has helped to calm panic buying.

He also acclaimed the “excellent” cooperation from the retailers with government.

“They have committed to help us ensure that there are no unjustified price increases in this period. The retail groups include Shoprite-Checkers, Pick n Pay, Woolworths, Spar, Game, Dion, Makro, Clicks and Dischem.”

Patel indicated that the department today issued directions under the Disaster Management Act and regulations under both the Competition Act and Consumer Protection Act, dealing with pricing and supply matters during the national disaster to ensure that there are no unjustified price hikes or stockpiling of goods.

In terms of pricing, the regulations and directions provide that these may not exceed the increase in the costs of the raw materials or inputs and profit levels should not be hiked higher than the period prior to the outbreak of Covid-19.

The regulations cover the full supply chain and will limit price increases of suppliers in similar fashion.

In terms of stockpiling, Patel said all retailers must take steps to limit the quantity of goods sold to any individual consumer; and a list of basic products will be covered.

Moreover, he indicated that retailers must take steps to maintain adequate stocks of basic goods during this period, including for weekends and month-end shopping.

There are also provisions to ensure that wholesalers take steps to ensure that there is no stock-piling at the cash-and-carries, he noted.

Patel emphasised that breaches of the regulations could have serious consequences. 

“Some of the penalties in the relevant legislation include penalties of up to R1-million, or penalties up to 10% of a company’s turnover, or jail sentences of up to one year. We do not want to invoke any of these as the best approach is one of partnership and we welcome the solidarity and positive response from our people in the past few days.”

The National Consumer Commission now has a toll-free hotline that can be used to report price spikes and unjustified price increases, reached at 0800-014-880.