Summary of Consumer Protection and

26 March 2020

Following President Cyril Ramaphosa’s declaration of a National State of Emergency in accordance with Section 27(2) of the Disaster Management Act 57 of 2002 in respect of the COVID-19 virus that has been declared a global pandemic by the World Health Organisation and the Minister of Cooperative Governance and Traditional Affairs’ subsequent publishing of Regulations applicable to the state of disaster which were Gazetted and came into force on the 18th of March 2020, the Minister of Trade and Industry has since published further regulations and directions in accordance with Section 78 read with Section 8(3)(f) of the Competition Act 89 of 1998 and Section 120(1)(d) read with Sections 40 and 48 of the Consumer Protection Act 68 of 2008.

The purpose of these regulations is to promote concerted conduct to prevent an escalation of the national disaster and to alleviate, contain and minimise the effects of the national disaster. Additionally, these regulations seek to protect consumers and customers from unconscionable, unfair, unreasonable, unjust and improper commercial practices during the national disaster.  These regulations are summarised below:

Excessive Pricing

• In terms of Section 8(1) of the Competition Act, a dominant firm may not charge excessive prices to the detriment of consumers or customers.
• In terms of Section 8(3)(f) of the Competition Act and Section 120(1)(d) of the Consumer Protection Act, a material price increase relating to basic food and consumer items, emergency products and services, medical and hygiene supplies, and emergency clean-up products and services, which do not correspond with an increase in the production costs or represents an increase in the net margin above the average margin for those goods and services in a three period prior to March 1 2020, will be crucial factors in determining whether a price can be regarded as excessive or unfair.

Supply of Goods and Services

• A supplier must develop and implement reasonable measures to maintain adequate stock levels and to ensure the equitable distribution of the abovementioned goods and services to consumers and small businesses. These measures may also include the limiting of the number of the following goods and services sold to consumers:
  • Toilet paper;
  • Hand sanitiser;
  • facial masks;
  • disinfectant cleaners;
  • surgical gloves;
  • surgical masks;
  • disinfectant wipes;
  • antiseptic liquid;
  • all purpose cleaners;
  • baby formula;
  • disposable nappies;
  • bleach;
  • cooking oils;
  • wheat flour;
  • rice;
  • maize meal;
  • pasta;
  • sugar;
  • long life milk;
  • canned and frozen vegetables;
  • canned, frozen and fresh meat, chicken or fish;
  • bottled water; and
  • the provision of private medical services relating to the testing, prevention and treatment of COVID-19.
  • A retailer must prominently display a notice in each of its stores that states that it has developed and will implement the above measure and must adequately and diligent carry out these measures.

Penalties

• Failure to comply with the above regulations may result is the imposition of a fine of R1 million, 10% of firm’s turnover, and/or imprisonment for a period not exceeding 12 months.