Dis-Chem Pharmacies is set to be the first major retailer of pharmaceutical products to face the wrath of competition authorities for excessive pricing during the COVID-19 crisis.
The Competition Commission said today, it had referred the company to the Competition Tribunal for prosecution after its investigation found that Dis-Chem had charged excessive prices on essential hygienic goods to the detriment of consumers and in contravention of the country’s competition laws.
The competition watchdog found that the company had inflated the price of 50 pieces of masks from R43.47 (excluding VAT) in February to R156.95 in March when the country reported its first case of COVID-19, a huge increase of 261%.
The company was also found to have increased the price of five surgical masks from R13.27 to R19.03, a price increase of 43%.
Competition Commissioner Tembinkosi Bonakele, said the regulator has asked the Tribunal to impose a maximum penalty against Dis-Chem.
“People who sell these essential products ought to appreciate that these are literally life-saving items right now,” Bonakele said.
“They shouldn’t be exploitative and take advantage of cash strapped consumers during the worst time in our history. We will spare no effort in protecting the consumers.”
The maximum penalty the Tribunal can impose on Dis-Chem is 10% of the company’s turnover. Companies such as Dis-Chem have largely been shielded from the impact of COVID-19 as they are regarded as providing essential services and have been operating during the lockdown that has seen other companies in other industries temporarily closing shop. The JSE-listed company is valued at just over R20 billion.
Ivan Saltzman, founder and CEO of Dis-Chem, said the allegations made by the Commission were untrue.
“Dis-Chem categorically denies these allegations. It confirms that its pricing is within regulated guidelines and states it does not engage in price-gouging or excessive price-fixing. It is examining the specific charges and allegations and will respond in due course,” Saltzman said. – By Kabelo Khumalo
