Covid-19: Eleven firms investigated for hiking prices during pandemic
Eleven firms are under investigation for hiking their prices as the demand for products used to mitigate the spread of Covid-19 increases.
“We have had complaints about individuals and firms increasing prices unjustifiably. The consumer and competition commissions met and are now investigating 11 firms found to be selling products like face masks and hand sanitisers for high prices and abusing the situation‚” trade and industry minister Ebrahim Patel said on Tuesday.
Patel vowed that prosecutions will follow and offenders will face sharp penalties.
The government announced last week that if companies hike the price of basic food items‚ medical and hygiene supplies‚ or stockpile goods‚ they could be liable to a fine of up to R1m‚ or 10% of their annual turnover‚ or jail time of up to 12 months.
It also published a list of 22 products that it said the two regulators‚ the consumer and competition commissions‚ would monitor to ensure there are no unjustified price increases. These include basic foods‚ personal care products and hygiene products such as disinfectants and sanitising and cleaning agents as well as key medical supplies like surgical masks and gloves.
Patel said the consumer and competition authorities were alerted to the price increases by consumers. The national consumer commission has established a toll-free hotline: 0800 014 880.
Unpacking some of the measures put in place to stimulate the economy during the 21-day lockdown‚ Patel said the R3bn from the Industrial Development Corporation (IDC) was industrial funding that would be available to South African-owned businesses.
The IDC has made available the R3bn in the next quarter to support businesses during the crisis.
Elements of the facility include R500m allocated for trade finance to import essential medical products‚ and R700m for working capital‚ equipment and machinery. It will also address surges in demand to ensure food security is prioritised and support for supply chains that are interrupted by large companies that are closing down.
Patel said the funding will also provide working capital to ensure energy security and working capital for component manufacturers.
Essential services that fall outside the normal IDC sectors will also be considered‚ Patel announced.
“We have relaxed the arrangements in the IDC and for existing IDC clients. There are large numbers of South African businesses the IDC is already in contact with to consider repayment deferments on a case-by-case basis‚” he said.
Patel said the exemptions for banks announced on Friday are meant to help banks co-ordinate on measures which can be used to support businesses and ordinary account holders during this period.
The exemptions will allow banks to work together to devise programmes and relief measures to help small businesses‚ consumers and companies in distress through the financial and economic challenges.
“In particular the exemptions will enable the banks to co-ordinate on matters like payment holidays and debt relief for businesses and individual citizens subject to financial stress‚ to put limitations on asset repossessions of business and individual citizens‚ and to co-ordinate on the extension of credit lines to individual and businesses subject to financial stress‚” he said.
The exemptions‚ the minister said‚ will allow banks to work together to ensure the continuing functioning of the payment system as well as sharing information and resources to ensure continued availability of bank notes at ATMs‚ branches and businesses.
“We have basically done extraordinary things to enable the banking system to remain strong and intact so that South Africans can access banks in the next three weeks‚” he said.
The government will publish a special government gazette on Tuesday to enable shopping mall owners and tenants to consider “co-ordinating their actions” and reach agreements to address matters such as payment holidays or rental discounts to tenants‚ said Patel.
He said the regulations would place limitations on evictions to ensure shops and others whose income will be falling sharply during the lockdown have the necessary flexibility and space to survive with as few adjustments as possible.
He said the regulations would initially cover three areas: personal care functions‚ restaurants and shops selling clothing‚ footwear and homeware.
The controls put in place will not affect trade with neighbouring countries to ensure there is food supply across the region.
Source: TMG Digital.