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HomeMedico-LegalFirm fined R76,000 in first contested masks price hikes case

Firm fined R76,000 in first contested masks price hikes case

The Competition Tribunal has found a Pretoria-based company guilty of hiking the prices of face masks. Babelegi Workwear and Industrial Supplies CC was fined R76,000, according to TimesLIVE. It notes this is the first contested excessive pricing case in the context of COVID-19, as other companies reached consent agreements with the Competition Commission after admitting guilt over excessive pricing.

On 9 April, the commission referred to the tribunal the first excessive pricing complaint, in the context of COVID-19, against Babelegi. It denied the commission’s claims, arguing it was not a dominant firm during the complaint period and that it anticipated that its supplier would increase its price of masks during this time.

The tribunal heard the matter on an urgent basis via video conferencing. In its order and reasons, the tribunal found that Babelegi contravened section 8(1)(a) of the Competition Act by charging excessive prices for face masks that it sold to customers. The tribunal ordered the company to pay an administrative penalty of R76,040.

Babelegi’s first significant price increase occurred on 31 January, a day after the World Health Organisation declared COVID-19 a public health emergency of international concern. There was a further price increase in February.

On 5 March, when South Africa announced its first COVID-19 case, Babelegi again significantly raised its price. The tribunal said Babelegi’s mark-ups on the masks sold increased significantly with each successive price increase during this period. ‘Babelegi has not put up a rational and valid explanation for its successive and massive price increases … (that are) not substantiated by any corresponding increase in cost,’ the tribunal said.

 

[link url="https://www.timeslive.co.za/news/south-africa/2020-06-01-company-fined-r76000-for-excessive-pricing-on-face-masks/"]Full TimesLIVE report[/link]

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