Competition Commission v Evergreens Fresh Market (Pty) Ltd (CO009Apr20; 2020APRC0224) [2020] ZACT 96; [2020] HIPR 146 (CT) (30 April 2020)

Competition Commission v Evergreens Fresh Market (Pty) Ltd (CO009Apr20; 2020APRC0224) [2020] ZACT 96; [2020] HIPR 146 (CT) (30 April 2020)

The Tribunal confirmed the consent agreement between the Competition Commission and Evergreens Fresh Market (Pty) Ltd, finding that the respondent had applied a gross profit margin of 33.4% on hand sanitisers during March 2020, which exceeded the reasonable industry average of 20-25%. The Tribunal accepted the Commission's assessment that Evergreens held temporary market power due to the national disaster and that its pricing conduct was not justified by corresponding cost increases. The order required Evergreens to immediately desist from the excessive pricing conduct, reduce its margin to 25% or lower, donate the overcharged amount in hand sanitisers to Tembisa Provincial Hospital, and...

Citation
[2020] ZACT 96
Parties
Applicant: Competition Commission; Respondent: Evergreens Fresh Market (Pty) Ltd
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
30 April 2020
Case Number
CO009Apr20
Procedural Posture
Consent Order / Confirmation of Consent Agreement
Outcome
Consent agreement confirmed as an order of the Tribunal; remedial and compliance measures imposed.
Judges
Y Carrim, E Daniels, F Tregenna
Legal Topics
Excessive Pricing, Covid 19 Regulations, Dominance, Consumer Protection, Margin Analysis
Competition Law Excessive Pricing Covid 19 Regulations Dominance Consumer Protection Margin Analysis

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Parties

Competition Commission

Applicant

Evergreens Fresh Market (Pty) Ltd

Respondent

Procedural Posture

Consent Order / Confirmation of Consent Agreement

Legal Issues

  1. 1 Whether Evergreens Fresh Market (Pty) Ltd engaged in excessive pricing of hand sanitisers during the COVID-19 national disaster period.
  2. 2 Whether the margin applied by Evergreens Fresh Market (Pty) Ltd was unreasonable and in contravention of section 8(1)(a) of the Competition Act and Regulation 4 of the Consumer Protection Regulations.
  3. 3 Whether the conduct warranted remedial action and compliance measures.

Ratio Decidendi

The Tribunal confirmed the consent agreement between the Competition Commission and Evergreens Fresh Market (Pty) Ltd, finding that the respondent had applied a gross profit margin of 33.4% on hand sanitisers during March 2020, which exceeded the reasonable industry average of 20-25%. The Tribunal accepted the Commission's assessment that Evergreens held temporary market power due to the national disaster and that its pricing conduct was not justified by corresponding cost increases. The order required Evergreens to immediately desist from the excessive pricing conduct, reduce its margin to 25% or lower, donate the overcharged amount in hand sanitisers to Tembisa Provincial Hospital, and...

Court Disposition

Consent agreement confirmed as an order of the Tribunal; remedial and compliance measures imposed.

Orders

  • Evergreens Fresh Market (Pty) Ltd must immediately desist from the excessive pricing conduct described.
  • Evergreens Fresh Market (Pty) Ltd must reduce its margin on hand sanitisers to 25% or lower with immediate effect.