CFO Rui Morais says Dis-Chem disappointed with Competition Tribunal decision

This follows the Tribunal's ruling that Dis-Chem has engaged in price gouging on Covid-19 masks.

Dis-Chem CFO Rui Morais has responded to the Competition Tribunal ruling that the company had engaged in the excessive pricing of surgical masks, citing several errors in fact and law.

According to the Competition Tribunal, Dis-Chem was charged with hiking the cost of surgical face masks at the start of the Covid-19 pandemic and as a result, has been fined with R1.2 million.

“We are most disappointed with the Competition Tribunal’s decision,” says Rui Morais. “As the decision seems to contain several errors of fact and law, we have, in conjunction with our legal advisors, elected to take the matter on appeal to the Competition Appeal Court.” 

He explains that he believes Competition Tribunal failed to take into consideration that Dis-Chem reacted in a responsible manner to significant disruptions to the market and that the group increased retail prices while it was facing significant price increases and shortages. 

“The Competition Commission’s case focused on a very short time in March without considering the full context in which the business had to find masks and cover its costs. The priority was to get masks into our stores to meet the demand, and we did our best to make masks available to as many people as possible by reducing pack sizes. When the input prices dropped, we dropped our prices accordingly. Within weeks, we had restored supply at reduced prices and immediately passed on those savings to customers. Unfortunately, this was ignored by the competition authorities,” he adds. 

Rui says that he believes it is “regrettable” that Dis-Chem’s conduct was considered without regard to the market realities at the time and that these actions have been cast in a negative light as part of the panic and uncertainty that surrounds the Covid-19 pandemic. 

“We have been deeply troubled by the Competition Commission charges, but we have not allowed them to interrupt our priority of adding value to our stakeholders – our partners, suppliers, staff, and customers. We have continued to place our customers first by offering them a critical service throughout the duration of the lockdown and our commitment in this regard is absolute. Throughout this time our employees have played a critical role in this regard and for that we are deeply appreciative.” 

He also says that Dis-Chem has continued to support an ever-growing number of needy beneficiaries via the Dis-Chem Foundation and that the company has augmented its support of the Solidarity Fund, in partnership with other players, to provide free Covid-19 testing to the most vulnerable members of society. 

“As we’ve said before, we have always prided ourselves on supporting our customers and communities and there is no basis for us to be short-sighted by manipulating prices in this time of crisis in South Africa. We are confident that the appeal hearing will be satisfactorily concluded,” Rui concludes.