The Competition Commission said on Wednesday it has fined a distributor of face masks R11 million for price inflation.
The commission said MATUS, a company with offices in major cities across South Africa, agreed to pay an administrative penalty of R5.9 million after admitting that it inflated its gross profit margins on hygiene products.
It has also agreed to pay R5 million into the Solidarity Fund for Covid-19 relief measures.
"Further, it will, with immediate effect, reduce its gross profit margin on dust masks to acceptable levels for the duration of the state of national disaster," the commission said.
It said this meant that MATUS would, for the duration of the national disaster declared in South Africa, not increase its profit margins above the levels that they were on February 16.
The commission launched a probe against the company after it received information that it had hiked prices of dust masks and found that the price increases were excessive, both in terms of the Competition Act and regulation 4 of the Consumer Protection Regulations.
It said it had reached "numerous" settlements with small retailers, mainly hardware stores, and pharmacies found to put excessive mark-ups on dust masks and essential hygiene sanitisers since the start of the ongoing coronavirus crisis.
"Most of these shops did not sell these products before March this year," it said.
The retailers have agreed in terms of the settlements to reduce their prices to appropriate levels and to contribute varying amounts of the products in question to the Solidarity Fund and charities nominated by the commission.
MATUS is a supplier of masks overalls, hand sanitisers and first aid kits sourced from local and international manufacturers.
- African News Agency (ANA)
