Tribunal fines Dis-Chem R1.2m for excessive pricing of face masks

7th July 2020 By: Tasneem Bulbulia - Creamer Media Reporter

The Competition Tribunal has ordered pharmacy group Dis-Chem Pharmacies to pay an administrative penalty of R1.2-million for allegedly charging excessive prices for surgical face masks during the Covid-19 pandemic.

The tribunal says Dis-Chem contravened Section 8(1)(a) of the Competition Act in that it charged an excessive price for three types of surgical face masks to the detriment of consumers during March.

The tribunal’s detailed reasons will be made available publicly in due course. It has, however, provided a brief summary containing several excerpts.

Firstly, the tribunal considered the background to the Covid-19 pandemic as the economic context in which Dis-Chem had increased its prices on three occasions.

According to the tribunal, the Competition Commission had established that Dis-Chem had exerted market power in its pricing of the face masks by increasing its prices to significant levels in the context of the Covid-19 pandemic.

One such increase took place on the very day that South Africa’s first Covid-19 case was announced.

The tribunal says Dis-Chem had failed to show that its price increases were reasonable.