Government announces massive penalties for retailers that allow stockpiling

South Africa’s government has introduced stern measures to curb panic buying and excessive price increases meant to take advantage of desperate consumers in the wake of the coronavirus crisis.

Trade and Industry minister Ebrahim Patel prices may not exceed the increase in the cost of the raw material and that all retailers will be required to take steps to curb this while ensuring stock availability, including on weekends and month end.

Patel warned that companies that do not observe the government’s directive could be fined R1 million or 10% of a company’s turnover and jail sentences of a year.

“We are doing this to ensure that we don’t have unjustified price hikes or stockpiling of goods. We are doing this to protect consumers and ensure fairness and social solidarity during this period,” said Patel.

“There is anecdotal evidence in price hikes in areas such as facemasks and hand sanitisers. We are appreciative of the fact that the majority of South Africans have not rushed to shops and have remained calm.”

The phenomenon of panic buying surged from Monday following President Ramaphosa’s announcement of the national state of the disaster the previous night as the government struggles to contain the coronavirus which has brought the global economy to its knees.

Patel said that retail groups Shoprite, Checkers, Pick n Pay, Woolworths, Spar, Game, Dion, Makro, Clicks and Dischem have all agreed to put measures in place to prevent stockpiling and an unjustified price increases in this period.

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