Government warns retailers against unjustified price hikes

South African currency.

The government announced strict new regulations to prevent retailers from overpricing essential goods during the coronavirus crisis.

And when President Cyril Ramaphosa addressed the nation on Monday night, announcing a 21-day lockdown, he also said that measures were being put in place to prohibit “unjustified price hikes”. “I want to make it clear that we expect all South Africans to act in the interest of the South African nation and not in their own selfish interests. We will therefore act very strongly against any attempts at corruption and profiteering from this crisis.”

After the president declared the outbreak a state of emergency on Sunday March 15, social media was flooded with pictures of empty shelves in supermarkets.

Items such as toilet paper, surgical gloves and masks were high in demand and sold out at most shops in the far south.

The empty shelves and long queues prompted some retailers to cash in on the coronavirus crisis, hence the announcement by the government.

Facebook groups were filled with messages of residents expressing anger towards those who bought in bulk while others urged people to stop bulk buying.

One message read: “To everyone stockpiling or planning on stockpiling. Please consider the elderly and those who cannot afford to stockpile. The shelves are currently empty as people are only thinking of themselves and panic buying. Please think of those who are now not able to feed their families because you bought six month’s worth of something.”

The new regulations which are part of the Disaster Management Act, were signed by Minister of Trade and Industry, Ebrahim Patel, on Thursday March 19 and stated that companies were not allowed to hike prices, for certain items, by more than the increases in the cost to produce those products.

They are also not allowed to hike their profit margins on these products to above the average mark-ups.

The list of products include: Toilet paper, hand sanitiser, facial masks, disinfectants and cleaners, surgical gloves, surgical masks, disinfectant wipes, antiseptic liquids, all-purpose cleaners, baby formula, disposable nappies, bleach, cooking oils, wheat flour, rice, maize meal, pasta, sugar, long-life milk, canned and frozen vegetables, canned, frozen and fresh meat, chicken or fish and bottled water.

Prices for private medical services relating to the testing, prevention and treatment of the coronavirus will also be covered by the new regulations.

Non-compliance could result in fines up to R1 million or 10% of company turnover, and imprisonment for up to one year. It also requires that retailers must ensure fair distribution of goods to customers, including small businesses, and must also maintain adequate stocks of goods.