Competition Commission v Sentra Kem Pharmacy CC (CO106Aug20) [2020] ZACT 54 (2 September 2020)

Competition Commission v Sentra Kem Pharmacy CC (CO106Aug20) [2020] ZACT 54 (2 September 2020)

The Tribunal confirmed the consent agreement on the basis that Sentra Kem Pharmacy CC's conduct in charging excessive prices for facial masks during the national disaster period may constitute a contravention of section 8(1)(a) of the Competition Act read with Regulation 4 of the Consumer Protection Regulations. The respondent's gross profit margins exceeded the competitive benchmark, and the price increases were not justified by corresponding cost increases. The respondent agreed to pay a contribution to the Solidarity Fund, reduce future margins, implement compliance measures, and circulate the agreement to staff. The confirmation of the consent agreement resolves the dispute in full...

Citation
[2020] ZACT 54
Parties
Applicant: Competition Commission; Respondent: Sentra Kem Pharmacy CC
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
2 September 2020
Case Number
CO106Aug20
Procedural Posture
Consent Order Application / Confirmation of Consent Agreement
Outcome
Consent agreement confirmed as an order of the Tribunal; full and final settlement of all proceedings between the Commission and Sentra Kem Pharmacy CC relating to the alleged contravention.
Judges
E Daniels, AW Wessels, Y Carrim
Legal Topics
Excessive Pricing, Covid 19 Regulations, Dominance, Consumer Protection, Gross Profit Margin, Settlement Agreement
Competition Law Commercial and Corporate Excessive Pricing Covid 19 Regulations Dominance Consumer Protection Gross Profit Margin Settlement Agreement

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Parties

Competition Commission

Applicant

Sentra Kem Pharmacy CC

Respondent

Procedural Posture

Consent Order Application / Confirmation of Consent Agreement

Legal Issues

  1. 1 Whether Sentra Kem Pharmacy CC charged excessive prices for facial masks during the national disaster period in contravention of section 8(1)(a) of the Competition Act and Regulation 4 of the Consumer Protection Regulations.
  2. 2 Whether the conduct constituted an abuse of dominance under the Competition Act.
  3. 3 Whether the consent agreement should be confirmed as an order of the Tribunal.

Ratio Decidendi

The Tribunal confirmed the consent agreement on the basis that Sentra Kem Pharmacy CC's conduct in charging excessive prices for facial masks during the national disaster period may constitute a contravention of section 8(1)(a) of the Competition Act read with Regulation 4 of the Consumer Protection Regulations. The respondent's gross profit margins exceeded the competitive benchmark, and the price increases were not justified by corresponding cost increases. The respondent agreed to pay a contribution to the Solidarity Fund, reduce future margins, implement compliance measures, and circulate the agreement to staff. The confirmation of the consent agreement resolves the dispute in full...

Court Disposition

Consent agreement confirmed as an order of the Tribunal; full and final settlement of all proceedings between the Commission and Sentra Kem Pharmacy CC relating to the alleged contravention.

Orders

  • Sentra Kem Pharmacy CC must pay R15,785.03 to the Solidarity Fund within 7 calendar days of confirmation of the consent agreement.
  • Sentra Kem Pharmacy CC must immediately desist from the excessive pricing conduct described.