A company distributing face masks has been fined R11 million by the Competition Commission. It was alleged that the company inflated prices of essential hygienic items during the Covid-19 disaster.
The Commission has reached an agreement with the company, MATUS to pay an administrative penalty of R5.9 million. This comes after the company admitted to have been increased its gross profit margins with regards to essential hygienic products.
MATUS, with offices in Johannesburg and Cape Town supplies and distributes personal protective equipment such as dust masks including FFP1 and FFP2 masks overalls and hand sanitisers. The commission’s spokesperson Sipho Ngwema said the company will also pay R5 million to the Solidarity Fund for COVID-19 with immediate effect.
“The company will also contribute R5 million to the Solidarity Fund for COVID-19. 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,” said Ngwema.
The commission initiated an investigation into the matter, after obtaining information implicating the company in a series of wrong doings.
“Subsequently, the commission found that MATUS unreasonably increased the prices of dusk masks resulting in excessively inflated gross profit margins in contravention of the Competition Act and Regulation 4 of the Consumer Protection Regulations,” said Ngwema.
Ngwema said the commission had also concluded numerous consent settlements with small independent retailers and pharmacies with regards to COVID-19 cases.
“These retailers, as part of the settlement, will reduce prices to appropriate levels and will contribute various amounts or essential hygienic items, based on the merits of each case, to charity organisations nominated or approved by the commission, including the Solidarity Fund for COVID-19. In some cases, some retailers have agreed to freeze price increases and/or run specials.” said Ngwema.
