Citizen reporter
2 minute read
15 Jul 2020
9:30 am

Food Lover’s Market found guilty for excessive pricing for ginger

Citizen reporter

The company was ordered to donate essential goods to an old age home in Randfontein.

Ginger. Picture: iStock

Food Lover’s Market was found guilty of contravening the Competition Act after it admitted to charging excessive prices for “essential” raw ginger sold at one of its stores, the Competition Tribunal confirmed.

The Competition Commission and Food Lover’s reached an agreement for the company to stop the excessive pricing of the product according to TimesLive.

The commission also ordered Food Lover’s to donate essential goods to the Mohlakeng Old Age Home located in Randfontein, Gauteng.

The essential goods were worth R18,579, which was reportedly based on the additional income derived by the company due to the significant margins increase on ginger in May.

On 14 May, it was reported that complaints were received by the commission regarding the company’s allegedly charging spiked up prices per kilogram of raw ginger at its Hillfox and Westgate stores.

The commission found that Food Lover’s average mark-up and gross profit margins for ginger in May 2020 were unreasonably high at the Westgate store, as it was considered as an essential product during lockdown in terms of the consumer protection regulations.

This was in comparison to the mark-up and gross profit margin before the lockdown.

The company also agreed to reduce its gross profit margin on the product at the Westgate store to an agreed maximum percentage for the rest of lockdown.

Since the start of lockdown, the commission has reached more than 20 consent agreements with different companies in relation to excessive pricing have been for sanitisers, gloves and face masks.

Dis-Chem was fined R1.2 million after losing its excessive pricing case for masks earlier this month.

The case was referred to the tribunal by the Competition Commission in April, after the Competition Tribunal received complaints from the public about excessive pricing for surgical masks.

Dis-Chem argued it has been forced to hike prices because of disruptions in supply, as well as price increases by suppliers during a hearing before the tribunal in May.

The tribunal nevertheless ruled that the pharmacy chain contravened the Competition Act by charging excessive prices for three types of surgical face masks which was to the detriment of consumers during March.

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