The South African Competition Tribunal has fined the country’s leading pharmacy chain, Dis-Chem, for price gouging. The retailer has been fined R1.2m ($70,930) for increasing the cost of surgical face masks at the start of the COVID-19 pandemic.
The case was referred by the Competition Commission in April following public complaints about excessive prices for masks. Dis-Chem had a hearing before the tribunal the next month. It claims that it was forced to raise prices because of supply chain disruptions and price increases from suppliers. It also claims other pharmacy chains increased their prices.
The Competition Commission argued that Dis-Chem had exerted market power by “increasing its prices to significant levels” during the pandemic. The tribunal found that Dis-Chem had failed to show the price increases were reasonable.
Dis-Chem stores remained open during the lockdown. However, the company attracted attention by withholding rental payments to mall owners and negotiating for low rent in April.
During the lockdown, Dis-Chem partnered with the Solidarity Fund to offer free COVID-19 testing to South Africans who could not afford it. However, it also charged some employees R500 ($29.5) for testing if it turned out they had no symptoms and had negative test results.
