Pharmacy chain Dis-Chem has withdrawn its appeal against a decision by the Competition Tribunal to fine it R1.2 million for hiking the prices of certain types of surgical face masks at the start of the Covid-19 pandemic.
“We have been consistent in arguing that price gouging in a pandemic deprives consumers, particularly poor consumers, of access to essential goods that are necessary to prevent a further escalation of the pandemic,” said Competition Commissioner Tembinkosi Bonakele in a statement on Friday.
After receiving complaints from the public about alleged excessive pricing for face masks, the watchdog referred the case to the Competition Tribunal in April. Dis-Chem at the time argued that it had been forced to hike prices because of disruptions in supply and price increases by suppliers.
The tribunal, however, ruled that the pharmacy chain’s price hikes were unreasonable.
Dis-Chem subsequently applied to the Competition Appeal Court to appeal the decision, saying it contained a “number of errors of fact and law”. According to the Competition Commission, this appeal has now been withdrawn.
In a statement on Friday, Dis-Chem said that it chose to withdraw the appeal despite “legal advice that it was likely to succeed”.
The pharmacy group said its decision was informed by “justifiable anger at procurement abuses during the provision of personal protective equipment at taxpayers’ expense that have been recently exposed”.
“Dis-Chem is not involved in any of these scandals and, together with the rest of the country, is upset at these developments,” it said.
The group said the ongoing appeal on what it says are “entirely different legal issues” could taint its reputation by “misplaced association”.
“We remain confident that we neither overcharged nor broke the law. We believe that our price adjustments during March 2020 were justified, given the increased costs we were facing and our commitment to ensure stock availability,” said the group’s CEO, Ivan Saltzman.
“It is important to recall that in April 2020, Dis-Chem reduced its mask prices when its costs started reducing, even before the Competition Commission began its investigation.
“As such, we believe that we would have succeeded on appeal. However, we would rather move forward and focus on delivering value to consumers for the products they need, especially during the continued challenging environment. Accordingly, Dis-Chem has instructed its legal team to withdraw the appeal.”