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Competition Appeal Court upholds R3.5 million penalty on SAPS mask supplier for price gouging

The Competition Appeal Court has upheld the Competition Commission’s decision to impose a R3.5 million penalty on local business Tsutsumani Business Enterprises for marking-up the price of surgical face masks by 87% in 2020 when the Covid-19 pandemic hit South Africa.

The South African Police Service (SAPS) purchased 500,000 three-ply surgical face masks from Tsutsumani between April 5 and 29 of that year. The Competition Commission has since welcomed the decision by the Competition Appeal Court (CAC) handed down last Friday, which confirmed a decision of the Competition Tribunal made in April 2020.

The CAC’s ruling followed an unsuccessful review application brought by Tsutsumani against the Tribunal’s decision. The matter stemmed from an investigation by the Commission following a complaint filed by the SAPS against Tsutsumani for alleged excessive pricing of masks supplied to SAPS.

The urgent procurement of personal protective equipment (PPE) was necessitated by the advent of the Covid-19 pandemic and the National State of Disaster, which required all SAPS staff to wear masks. At the time when the pandemic first landed on our shores, the SAPS required around nine million masks per month for use by its staff on the frontlines of combating the Coronavirus during the lockdown.

Tsutsumani had denied the excessive pricing allegations. This was the first excessive pricing case referred to the Tribunal by the Commission in the context of a public procurement process during the Covid-19 pandemic.

“The CAC judgment underscores the fact that excessive pricing of essential goods and services, within the context of public procurement, during a pandemic or national disaster, will not be tolerated by competition authorities,” said Competition Commissioner Doris Tshepe.

Source: www.iol.co.za

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Competition Appeal Court upholds R3.5 million penalty on SAPS mask supplier for price gouging

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