Dis-Chem found guilty of inflating mask prices: Fined R1.2 million

Dis-Chem found guilty of inflating mask prices: Fined R1.2 million

- Pharmacy giant Dis-Chem has been found guilty of price gouging by the Competition Tribunal

- The chain has been fined R1.2 million after the watchdog received complaints about face masks

- The tribunal dubbed the prices as 'utterly unreasonable' in its ruling

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Dis-Chem has been found guilty of price gouging by the Competition Tribunal, accused of hiking the prices of surgical face masks.

The pharmacy chain was fined R1.2 million for raising the prices of critical surgical face masks at the beginning of the Covid-19 pandemic.

Briefly.co.za reported that the Competition Commission had started investigations of retail giants taking advantage of the panic when the virus arrived in South Africa.

The watchdog had received complaints from the public concerning Dis-Chem hiking the prices of masks.

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Dis-Chem Pharmacy outlet
Source: Twitter

READ ALSO: 11 firms accused of inflating prices amid Covid-19 under investigation

Dis-Chem had argued during a hearing that disruptions in supply and suppliers increasing prices had forced them to adjust prices, claiming the competitors in the industry had done the same.

However, the tribunal wasn't buying this story and ruled that Dis-Chem had violated the Competition Act by charging inflated prices for three kinds of surgical face masks.

The commission had shown how Dis-Chem had exerted market power by increasing prices to 'significant levels', reports News24:

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

READ ALSO: Coronavirus: Malema warns against profiting from national crisis

The commission had ruled that Dis-Chem had failed to prove the price increases were reasonable:

"In our view, Dis-Chem’s massive price increases of surgical masks during the complaint period … are utterly unreasonable and reprehensible.
"Poorer customers would have been excluded from accessing the masks by such exorbitant increases, other customers would have spent more on these items as a percentage of their disposable income."

The detailed reasons for this detrimental ruling are expected to be published by the tribunal in due course.

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Source: Briefly.co.za

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