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Cape Town – The Competition Tribunal has clamped down on Cambridge Food Jozini, a subsidiary of Massmart Holdings, for excessive pricing of 25kg of maize meal, from R129.99 to R159.99 in April.
The tribunal received a complaint that the KwaZulu-Natal-based company had increased its gross profit margins on the 25kg top white maize meal, in contravention of the Competition Act and Regulation 4 of the Consumer Protection Regulations.
In a statement yesterday, the Competition Commission said it welcomed the tribunal’s decision confirming, as an order, a consent agreement between it and Cambridge Food Jozini.
In terms of the order, Cambridge Food Jozini has agreed to reduce its gross profit margin on the 25kg top white maize meal for the duration of the state of the national disaster.
It will also donate essential goods to Siyaphambili Qondile Home Based Care Project 1 to the value of R24 947.
The commission’s spokesperson, Siyabulela Makunga, said its investigation established that before the declaration of a National State of Disaster, Cambridge Food Jozini was selling the 25kg top white maize meal at lower prices.
“In terms of the order, Cambridge Food Jozini has agreed to reduce its gross profit margin on the 25kg top white maize meal for the duration of the state of the national disaster,” said Makunga.
He said that to date, the commission had referred and settled 30 Covid-19-related cases to the total value of R15 380 849.58, of which R5 573 380.88 had been donated to the Solidarity Fund.
“There have also been donations of essential goods to affected communities to the total value of R551 886.70.
“The commission urged firms to comply with the Competition Act during the state of national disaster and desist from exploiting consumers,” said Makunga.
Massmart spokesperson Refilwe Boikanyo said Cambridge Food was not found to have been guilty of contravening competition regulations, and the incident involved a single store.
“We chose to settle to expedite a process that would otherwise have resulted in costly and protracted litigation.
“This was made easier by the fact that the ‘no admission settlement’ involved a contribution of R24 947 to a charity in Jozini.
“The incident involved a single store that mistakenly applied a supplier price increase to stock that had been delivered to the store just prior to the effective date of a supplier- motivated increase.
“In terms of our consumer focus under Covid-19, Massmart was the only retailer to implement a price freeze during level 5 lockdown,” said Boikanyo.
She said following the initial three-week lockdown period they implemented a process according to which prices are only increased “in cases in which our suppliers can clearly demonstrate that their input costs have increased”.
Article Source: https://www.iol.co.za/capetimes/news/tribunal-cracks-down-on-excessive-maize-meal-pricing-88ad446a-d998-4983-8e68-71c8a933ec44
