A Cape Town-based chemical firm has agreed to pay a settlement amount of R600,000 for allegedly charging excessive prices for hand sanitiser.
In a statement on Monday, the Competition Commission said it had applied to the Competition Tribunal for confirmation as an order a settlement agreement with a Cape Town-based company, Caprichem (Pty) Ltd (Caprichem).
The commission said the settlement amount would comprise of an administrative penalty and a contribution to the Solidarity Fund, which was established to assist the vulnerable in the wake of the Covid-19 pandemic.
The commission said the administrative penalty would be R500,000, while R100,000 would be paid to the fund.
On 28 May 2020, the commission referred a complaint against Caprichem for excessive pricing of 5L hand sanitiser.
“Caprichem has agreed to reduce their gross profit margin on 5L hand sanitiser for the duration of the state of the national disaster.
“The commission’s investigation found that Caprichem increased the prices of its 5L hand sanitiser from R262 to R527 (including VAT) during the period 16 March to date, representing an increase in gross profit margin of 91% and a 1918% increase in net profit margin. This amounted to the total value of R548,422.96 of unduly earned profit,” the statement reads.
The commission said since the outbreak of Covid-19, it has received over 1,556 complaints or tip-offs related to excessive pricing of basic food products, masks and sanitisers.
“Of the 1,556 received complaints, 791 are Covid-19-related cases while 325 were referred for further investigations or prosecution. Most of these complaints have been from Gauteng.
“To date, the commission has referred and settled 18 Covid-19 related cases to the total value of R12,854,694 of which R5,316,990 has been donated to the Solidarity Fund. The Commission has encouraged firms to reach settlements in order to speed up the processing of excessive pricing cases. In most settlements, firms had undertaken to correct prices/margins and make a donation to a public interest organisation or the Solidarity Fund.”
(Compiled by Makhosandile Zulu)