The Competition Commission (Commission) welcomes the decision of the Competition Tribunal (Tribunal) on 19 August 2020, that confirms as an order a settlement agreement between the Commission and a Johannesburg-based wholesale distributor and manufacturer of medical products, LevTrade International (Pty) Ltd (LevTrade), for excessive pricing during the State of National Disaster as declared by President Cyril Ramaphosa.
The Tribunal has ordered LevTrade to pay an administrative penalty of R50 000,00 (Fifty Thousand Rand), and a contribution of R10 000,00 (ten thousand Rand) to the Solidarity Fund.
LevTrade has also agreed to donate essential goods, including surgical facial masks and hand sanitisers to the total value of R25 000.00 (twenty-five thousand Rand) to the Johannesburg Children’s Home.
This follows an investigation by the Commission which found that LevTrade has charged excessive prices on essential hygienic goods to the detriment of customers and consumers in contravention of Section 8(1)(a) of the Competition Act read with Regulation 4 of the Consumer Protection Regulations.
The Commission’s investigation has established that, prior to the declaration of a national state of disaster, LevTrade was selling respiratory masks N95 (FFP2) at far lower prices. A box of 20’s respiratory masks was increased by LevTrade from R139.00 (excl. VAT) on 19 February 2020 to R170.00 (excl. VAT) on 27 February 2020, a price increase of 22%. The price of a box of 20’s respiratory masks was further increased from R170.00 (excl. VAT) on 28 February 2020 to R310.00 (excl. VAT) on 05 March 2020, a price increase of 123%
The Commission found that the margins increased from an initial 76% in February 2020 to an increase of 292% in March 2020. During this period Levtrade received an overcharge profit of approximately R37,493 (thirty-seven thousand, four hundred and ninety-three rand).
To date, the Commission has referred and settled 34 COVID-19 related cases to the total value of R15 465 849.58 of which R5 583 380.88 has been donated to the Solidarity Fund. There have also been donations of essential goods to affected communities to the total value of R576 886.70.
The Commission urges companies to comply with the Competition Act during the state of national disaster and desist from exploiting vulnerable consumers.
Issued by The Competition Commission of South Africa
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