CompCom names company facing prosecution for hiking prices

With over 300 complaints being investigated by the Competition Commission for alleged inflation of prices regarding essential goods amid the nationwide lockdown, the commission has now referred its first case to the Competition Tribunal for prosecution against Babelegi Workwear, Overall Manufacturers and Industrial Supplies CC.

The commission investigated a complaint raised on March 24 and found that during the period of 13 January to 5 March, Babelegi increased its prices of facial masks from R41 per box up to R500 per box.

The matter has been referred to the competition tribunal and will be heard on Friday, 24 April.

“The commission has been inundated with hundreds of complaints from consumers about prices of certain essential goods and other basic food items that have suddenly skyrocketed.”

As the commission continues investigations into the more than 300 complaints against retailers and suppliers at a time when the country reels under a shortage of medical supplies and equipment, it has referred the matter to the courts for prosecution.

“The commission further found that Babelegi’s prices for facial masks increased by at least 888% when comparing the prices charged on 9 December 2019 to the prices charged on 5 March 2020. Mark-ups (and not prices) significantly dropped after 18 March 2020, allegedly after the supplier increased input prices. The supplier is now also under investigation for excessive pricing.

“Facial masks fall under the category of medical and hygiene supplies and have been identified as essential goods for the prevention and escalation of the Covid-19 pandemic.”

Other matters that have been concluded, but are yet to be referred to the competition tribunal include a probe of a hardware company that allegedly increased the price of surgical gloves over a period of a week from R99.99 to R170 with no cost increase justifications.

Other cases include a pharmacy that earned more than 300% mark-up on face masks and hand sanitiser, a wholesaler of chicken that increased mark-ups for chicken pieces by up to 50%, with no cost increase justifications, and a supplier of face masks that earned over 665% mark-ups.

The commission has appealed for organisations to stop exploiting consumers during “the worst possible time” and expects to see a wave of firm prosecutions in the next coming days.

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