Competition Commission v Retrospective Trading 199 CC t/a Merlot Pharmacy (CO018May20.2020) [2020] ZACT 53; [2020] 1 CPLR 303 (CT) (14 May 2020)

Competition Commission v Retrospective Trading 199 CC t/a Merlot Pharmacy (CO018May20.2020) [2020] ZACT 53; [2020] 1 CPLR 303 (CT) (14 May 2020)

The Tribunal confirmed the consent agreement between the Competition Commission and Merlot Pharmacy, finding that Merlot Pharmacy's pricing conduct in respect of hand sanitizers and facial masks during March and April 2020 may amount to a contravention of section 8(1)(a) of the Competition Act read with Regulation 4 of the Consumer Protection Regulations. The Tribunal accepted the Commission's findings that the respondent possessed market power due to the national disaster and lockdown, and that the excessive mark-ups and profit margins were not justified by cost increases. The remedial measures agreed to by Merlot Pharmacy, including immediate cessation of excessive pricing, reduction of...

Citation
[2020] ZACT 53
Parties
Applicant: Competition Commission; Respondent: Retrospective Trading 199 CC t/a Merlot Pharmacy
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
14 May 2020
Case Number
CO018May20.2020
Procedural Posture
Consent Order Application / Order Confirming Consent Agreement
Outcome
Consent agreement confirmed as an order of the Tribunal; full and final settlement of all proceedings relating to the alleged contravention.
Judges
Y Carrim, A Ndoni, A Roskam
Legal Topics
Excessive Pricing, Covid 19 Regulations, Dominance, Consumer Protection, Gross Profit Margin, Compliance Programme
Competition Law Commercial and Corporate Excessive Pricing Covid 19 Regulations Dominance Consumer Protection Gross Profit Margin Compliance Programme

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Parties

Competition Commission

Applicant

Retrospective Trading 199 CC t/a Merlot Pharmacy

Respondent

Procedural Posture

Consent Order Application / Order Confirming Consent Agreement

Legal Issues

  1. 1 Whether Merlot Pharmacy contravened section 8(1)(a) of the Competition Act by charging excessive prices for hand sanitizers and facial masks during the national disaster period.
  2. 2 Whether the pricing conduct was justified by corresponding cost increases or constituted excessive profit margins.
  3. 3 What remedial measures are appropriate to address the contravention and prevent recurrence.

Ratio Decidendi

The Tribunal confirmed the consent agreement between the Competition Commission and Merlot Pharmacy, finding that Merlot Pharmacy's pricing conduct in respect of hand sanitizers and facial masks during March and April 2020 may amount to a contravention of section 8(1)(a) of the Competition Act read with Regulation 4 of the Consumer Protection Regulations. The Tribunal accepted the Commission's findings that the respondent possessed market power due to the national disaster and lockdown, and that the excessive mark-ups and profit margins were not justified by cost increases. The remedial measures agreed to by Merlot Pharmacy, including immediate cessation of excessive pricing, reduction of...

Court Disposition

Consent agreement confirmed as an order of the Tribunal; full and final settlement of all proceedings relating to the alleged contravention.

Orders

  • Merlot Pharmacy must immediately desist from the excessive pricing conduct described.
  • Merlot Pharmacy must reduce its gross profit margin on facial masks and hand sanitizers to 20% or less for the duration of the national disaster.