Food Lover’s Market rooted out for excessive pricing

The Competition Tribunal has confirmed a consent agreement between the Competition Commission and Food Lover’s Market Holdings, whereby the firm agreed to stop excessive pricing for ginger sold at one of its stores.

It has agreed to donate essential goods worth R18,579 to an old-age home in Randfontein, Gauteng.

Since the outbreak of the coronavirus pandemic, the commission has reached just more than 20 consent agreements with companies in relation to excessive pricing for sanitisers, gloves and face masks, but this is the first in respect of a food product.

The commission received information around May 14 about allegedly excessive prices being charged per kilogram of raw ginger at Food Lover’s Market branches in Hillfox and Westgate in Gauteng.

The commission found, and the company admitted, that the average mark-up and gross profit margins for raw ginger in May 2020 at its Westgate store were unreasonably high for an essential product during the state of national disaster, when compared with the mark-up and gross profit margin in the preceding period.

This amounted to a contravention of the Competition Act.

The commission said ginger was viewed as essential in terms of the consumer protection regulations.

In terms of the agreement, the company undertook to, among other things, immediately stop the excessive pricing conduct that was reported.

It also agreed to immediately reduce Food Lover’s gross profit margin on raw ginger at the Westgate store to an agreed maximum percentage for the duration of the national disaster.

The company also undertook to donate essential goods to Mohlakeng Old Age Home.

The amount was based on, among other things, the additional income derived by Food Lover’s Market as a result of the significant increase in margins on raw ginger in May.

Three other companies also reached settlement agreements with the commission in relation to excessive pricing of masks and hand sanitisers.

Steelmate, in Boksburg, Ekurhuleni, agreed to donate R5,662 to the Solidarity Fund after being accused by the commission of excessively pricing dust face masks.

The company did not admit that its conduct constituted excessive pricing. However, it agreed to settle the matter by making the donation and reducing its gross profit margin on the sale of the masks to an agreed maximum percentage for the duration of the national disaster.

In its agreement, Umhlanga Medisport Pharmacy in KwaZulu-Natal agreed to donate hand sanitisers worth R20,000 to a child-support charity in the area.

The commission found that Medisport’s markups on face masks and hand sanitisers for March and April were unreasonable.

The tribunal also confirmed a consent agreement between the commission and Stelkor Pharmacy in Stellenbosch, which was accused of charging excessive prices for face masks in April.

The pharmacy agreed to pay R12,500 to the Solidarity Fund and immediately stop the excessive pricing, as described in the agreement.