Two companies inflating mask prices by 950% ordered to pay R1.5m penalty

Various protective face masks, worn by many people during the new coronavirus COVID-19 pandemic, are on display for sale outside a shop in Berlin's Kreuzberg district on April 2, 2020. (Photo by David GANNON / AFP)

The settlement follows the commission’s investigation which found that the two firms’ prices for the FFP1 mask increased hugely by 969,07% and 956%, as charged by Sicuro and Hennox, respectively.

The Competition Commission has welcomed the decision by the Competition Tribunal, which has ordered a consent settlement agreement with two companies, on the sell and importers of face masks, who were charged for excessive prices to the detriment of customers and consumers.

The tribunal settled with Sicuro Safety CC (Sicuro) and Hennox 638 CC t/a Hennox Supplies (Hennox) who have admitted that they increased their gross profit margins for filtering facepiece 1 (FPP1) face masks during March 2020 in contravention of the Competition Act, Regulation 4 of the Consumer Protection Regulations, the commission’s statement read.

Spokesperson for the commission Sipho Ngwema said on Friday: “The two companies have undertaken to develop, implement and monitor a competition law compliance programme incorporating corporate governance designed to ensure that its employees, management, directors, and agents do not engage in future contraventions of the act.”

The settlement follows the commission’s investigation which found that the two firms prices for the FFP1 mask increased hugely by 969,07% and 956%, as charged by Sicuro and Hennox, respectively.

Ngwema said the settlement includes that both companies circulate a statement summarising the content of the settlement agreement to all management and operational staff employed at Sicuro and Hennox within 14 calendar days from the date of confirmation of the order.

“They will submit a copy of a compliance programme to the commission within 60 business days of the date of confirmation of the settlement agreement as an order by the tribunal or such longer period as may be agreed with the commission depending on the duration of any lockdown imposed in terms of the legislation and directions.”

Sicuro and Hennox will pay an administrative penalty of R1.5 million and contribute R200,000 to the Solidarity Fund.

“The companies have also agreed to immediately desist from charging excessive prices to reduce their gross profit margin on FFP1 face masks to a mutually acceptable maximum for the duration of the state of the national disaster,” said Ngwena.

(Compiled by Sandisiwe Mbhele)

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