Tag: price gouging

Pick n Pay to cap garlic and ginger prices

By Philippa Larkin for IOL

Pick n Pay will cap its gross profit margin for ginger and garlic, which is good news for cash-strapped consumers, following recent public complaints that fingered seven retailers for price gouging.

South Africans are struggling to afford basic foodstuffs amid rising prices.

The move follows public complaints against seven retailers about the rising cost of these items. Picture: Brendan Magaar, ANA.
In recent months, the Competition Commission has received a number of complaints from members of the public alleging that certain Food Lover’s, Spar, Shoprite Checkers and Pick n Pay stores had increased prices of ginger and garlic.

The Competition Commission said yesterday it was pleased to announce the signing of a memorandum of agreement with Pick n Pay last week – the first retailer to do so – and it hoped to formalise similar agreements with other national retailers.

“This confirms that the company has capped its gross profit margin for ginger and garlic essential food items for the period covering January 28, 2021 to April 1, 2021, which may be extended. Pick n Pay has also instructed its franchises to price no higher than the corporate store price on ginger and garlic,” it said.

The commission said it had engaged with all the affected retailers, and expressed its concerns that the alleged significant price increases of ginger and garlic in certain retail outlets could result in a contravention of Consumer Protection Regulations and other relevant provisions of the Competition Act. In terms of the Consumer Protection Regulations, ginger and garlic fall under the category of “basic food and consumer items”.

It said although the wholesale prices for these products had increased due to heightened consumer demand during the second wave of infections, the commission was of the view that this did not warrant the large increase in absolute margins seen in some instances.

The Pietermaritzburg Economic Justice and Dignity research group published its Household Affordability Index for January 2021, which showed that the cost of a basic food basket had increased drastically.

The index showed that the price of maize meal and other maize products continued to increase, with basic and core food items such as sugar beans, rice, flour and bread seeing hikes of between 31 percent and 68 percent.

It said the cost of a basic food basket in January was R4 051.20, which was way above the monthly minimum wage.

 

By Theto Mahlakoana for EWN

The Competition Commission said that two companies partnered to overcharge the police by over R14-million when supplying it with 10 000 units of 25-litre hand sanitisers.

In its opening remarks at the competition tribunal hearing underway virtually, the entity’s Maya Swart further claimed that the companies – Bluecollar Occupational Health and Ateltico Investments – gained excessive profits by adding a gross profit margin of 54%.

This was one of several cases which were before the commission over COVID-19 excessive pricing.

Swart said that Bluecollar’s massive overcharge was not even comparable to the Dis-Chem price gouging matter which was heard last year.

READ: Dis-Chem found guilty of contravening Competition Act over face mask prices

The company – described by its lawyers as a small business which had no prior experience in dealing with hand sanitisers – is accused of charging the police excessive prices for bulk sanitisers between March and April of last year.

The commission claims that Ateltico funded Bluecollar for the procurement of the sanitisers with a view of splitting the profits 60/40.

Swart explains: “That’s an overcharge of R1,433.69 per unit. That’s a massive overcharge when you compare it to other price gouging cases.”

The companies have disputed the commission’s version of events, saying that the prices included transportation among other costs.

 

3M expands actions to fight Covid fraud

Source: Medical Process Outsourcing

3M continues to fight the global pandemic from every angle, and help ensure a safe supply of needed personal protective equipment, by expanding its region-specific resources to report and stop fraud around the world.

The company has launched an aggressive legal effort to stop profiteers who are attempting to take advantage of the demand for 3M products used by healthcare workers and first responders. Building on this work, 3M has established hotlines around the world to report suspected fraud and has created online resources to help spot price-gouging, identify authentic 3M respirators and ensure products are from 3M authorised distributors.

3M has investigated more than 7 700 fraud reports globally, filed 19 lawsuits, and has been granted nine temporary restraining orders and seven preliminary injunctions. More than 13,500 false or deceptive social media posts, over 11 500 fraudulent e-commerce offerings and at least 235 deceptive domain names have been removed. 3M has been awarded damages or has received settlement payments in seven cases, with all proceeds being donated to COVID-19 related charities.

3M has not, and will not, increase the prices of its respirators as a result of the pandemic. 3M is a global company with factories that produce respirators and other critical products needed to fight COVID-19 in the U.S., Europe, Latin America and Asia.

To combat increased counterfeiting and online fraud during the COVID-19 outbreak, 3M is working with law enforcement and customs agencies in every region of the world.

3M is also engaged with many major e-marketplace operators to detect and disrupt fraudulent and counterfeit respirator offers, including Amazon, Alibaba, Mercadolibre, Lazada, eBay, Flipkart, Shopee, Made-in-China and several others.

In particular:

  • Since the pandemic began, 3M has worked with customs and law enforcement agencies around the world to seize approximately 3.5 million counterfeit respirators, either as the products are moving through customs, or in targeted raids against suspected resellers and manufacturers of counterfeit products.
  • 3M has engaged with law enforcement agencies to fight counterfeiting in more than 1,200 actions around the world.
    In Latin America, 3M has worked with customs agencies in more than 15 cases to seize counterfeit respirators being imported into the region from other parts of the world, with several of the seized consignments containing more than 10,000 counterfeit respirators.
  • In the United Arab Emirates, 3M has worked with police and the Dubai Department of Economic Development to seize over 600,000 counterfeit respirators.
  • In Vietnam, a 3M investigation led to a raid and seizure of more than 150,000 counterfeit respirators. The Hanoi and Ho Chi Minh City Market Management Bureaus also seized the manufacturing equipment used to make the fake respirators.
  • In Europe, 3M is fighting multiple cases of fraud involving bad actors using .nl, .uk and .pl domain names intended to deceive buyers with offers of nonexistent or fake 3M respirators. Other scams include using the names of 3M employees in fake invoices and certificates to claim a relationship to the company. 3M is taking legal action and is working with law enforcement through the European Union.
  • In India, 3M is working with law enforcement agencies in multiple states to investigate and raid manufacturing operations producing counterfeit N95 respirators, and resellers offering counterfeit N95 respirators to the public, seizing fake products and holding bad actors responsible.
  • In South Africa, 3M is investigating numerous cases of fraud and the sale of counterfeit respirators. In two recent cases, South African customs seized over 100 000 counterfeit 3M respirators.

These are just some examples of the many actions 3M is taking to stop and deter fraud to protect people around the world.

 

Price gouging a global problem

According to a recent Fin24 article, 11 firms are being investigated for selling products such as face masks and hand sanitisers at inflated prices amid the Covid-19 crisis.

Last week, President Cyril Ramaphosa announced strict regulations to prevent businesses from hiking prices excessively for certain products – such as basic foods, personal care and hygiene products, as well as key medical supplies like surgical masks and gloves.

The firms will be investigated and, if necessary, prosecuted.

Penalties for flouting the regulations include:

  • R1 million in fine;
  • A fine of up to 10% of a company’s turnover; or
  • One year in jail.

An international problem

The problem of price gouging amid the Covid-19 crisis isn’t just a local one. The LA Times has reported that  Amazon has suspended more than 3 900 selling accounts in the US for violating its fair pricing policies.

This amounts to well over half a million offers, according to the online marketplace.
Amazon has subsequently deployed a team to identify and investigate “unfairly priced” products that are in high demand, such as protective masks and hand sanitiser.

Florida’s Attorney General Ashley Moody has issued more than 40 subpoenas because of alleged price gouging on “essential commodities” through accounts on Amazon.

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