Price-gouging by retailers and violations of the Covid-19 lockdown regulations by companies around the country have sparked a crackdown by the Competition Commission and other government agencies in a bid to protect consumers and workers.
On Tuesday, the commission announced that it was investigating more than 300 complaints — about excessive price increases of products including face masks, sanitisers, toilet paper and flu medication — that had been laid by consumers since the 21-day lockdown was declared last week.
In KwaZulu-Natal, a series of raids by the provincial department of economic development and tourism’s consumer protection unit have yielded a number of arrests. People have been arrested for inflating prices and for forcing staff to work under conditions that violated health and safety and lockdown regulations.
Several retailers in the Durban inner city, and in its northern and southern suburbs, have been charged for price-hiking by the department, and two business owners have already appeared in court this week for violating the Covid-19 regulations.
Competition Commission spokesperson Sipho Ngwema said it would prioritise cases against national retailers and suppliers and those laid by complainants who were involved in essential services — including health workers and police officials, who are at the forefront of the fight to contain the pandemic.
Ngwema said preliminary investigations had begun and that more than 100 national and independent suppliers and retailers had been given 48 hours to confirm or refute the allegations against them.
He said some retailers had blamed price increases on the ending of December and January promotional pricing, with the cost of goods returning to normal in February, when the pandemic gained momentum.
“There are, however, instances where price increases are not justified and the commission will pursue enforcement,” Ngwema said.
He said large national retailers had begun “instituting pricing discipline across their branches” since the commission made its initial inquiries.
In Secunda, AJ Safety, a small, independent retailer, had decided to refund customers R19 a mask after an intervention by the commission.
The company had increased prices from R5 to R20, allegedly without the knowledge of the owner, who had agreed to refund customers, a list of whom had been given to the commission to ensure compliance.
Ngwema said the Competition Commission was working with the National Consumer Commission to investigate complaints about the spiralling prices of agricultural products and basic foods.
“The commission is monitoring these prices, in consultation with other stakeholders in the policy sphere, and is also probing these price hikes with the traders and suppliers of these products. Appropriate steps and action will be determined after having considered all relevant factors that contribute to the costs of these products,” he said.
On Tuesday, teams from the KwaZulu-Natal department of environmental affairs and tourism consumer protection unit, backed by the South African Police Service (SAPS) and eThekwini metro police raided shops in the Durban central business district and in the Chatsworth township in the south of the city, after a wave of complaints from consumers and workers.
Economic development MEC Nomusa Dube-Ncube told the Mail & Guardian they had found retailers selling products ranging from flour and lamb to cleaning products at “ridiculously inflated” prices.
The department had opened criminal charges against the retailers for violating the Consumer Protection Act and the Disaster Management Act.
“It is saddening that people are being unethical and trying to make super profits out of poor people under such circumstances,” Dube-Ncube said. “We have to intervene to ensure that people who can barely afford the basics are not exploited.”
She said that in several cases pensioners had provided slips from their grocery shopping last month to prove that the prices being charged by the retailers had been increased significantly since the state of national disaster was declared.
“We will have to be very vigilant going forward to ensure that exploitation of consumers does not take place,” Dube-Ncube said. “It is really sad that there is so much unethical behaviour by unscrupulous business people.”
She said companies had also exploited the automated system for registering essential businesses to be issued permits when they were not, in fact, involved in essential services.
On Sunday, the owner of a factory that manufactures protective face masks in Glen Anil in Durban North was arrested. This was after inspectors from the department’s consumer protection unit found that he had kept 14 workers locked in the premises since the previous Monday.
The owner, Ming Lai He, was granted bail of R20 000 by the Durban magistrate’s court on Monday, when he appeared on charges of forced labour; failing to maintain a safe working environment; and contravening the disaster management regulations by failing to lock down his company, Chen Lu, which was not registered as providing essential services.
He allegedly forced the workers, who come from nearby Ntuzuma, KwaMashu and Umlazi, to work overtime and sleep on the premises to manufacture masks to meet the demand created by the Covid-19 pandemic.
The workers were paid and taken to their homes by the SAPS.
The case was postponed until June 20.
On Tuesday, a Umhlanga call centre owner, Mark Deva Chana, was released on bail of R5 000 after being arrested for violating the lockdown regulations on Monday.
Chana was arrested by the SAPS after more than 100 complaints from staff at CCI South Africa, which employs about 9 000 staff, that physical distancing was not being implemented at its premises, at which workers were not given masks or sanitiser for their protection.
Staff were allegedly forced to work as usual in groups of up to 300, without being given protective gear. This occurred at the High Street, Umhlanga call centre and at other centres owned by CCI.