SOUTH AFRICA - GOVT NEW LEGISLATION SEES LIMITS OF QUANTITIES OF GOODS SOLD TO CONSUMERS

The Department of Trade, Industry and Competition has been in discussion with the private sector and organised labour to get broad support for government’s actions and to mobilise their resources to complement and strengthen their efforts.

Trade and Industry Minister Ebrahim Patel said government is working with retailers and large food producers to ensure that the supply-chain remains strong and that basic goods are available to consumers.

Factories have reported that their production is stable and farmers have promised a bumper maize crop, he said.

"We have seen a spike in stock-piling earlier this week in some retail outlets that has tapered off somewhat yesterday. At the same time, there is anecdotal evidence of price spikes in areas such as face masks and hand sanitisers," said Patel.

Working with retailers in the past few days, all major retailers have now put limits on at least some products in their stores. This has helped to calm panic buying.  There has also been cooperation from the retailers with government and they have committed to help us ensure that there are no unjustified price increases in this period.

The department has issued directions under the Disaster Management Act and regulations under both the Competition Act and Consumer Protection Act, dealing with pricing and supply matters during the national disaster to ensure justified price hikes or stock-piling of goods.

"We are doing so in order to protect consumers and ensure fairness and promote social solidarity in this period," said Patel.

The regulations and directions provide for the following:

Prices

1. Price rises may not exceed the increase in the costs of the raw materials or inputs and profit levels should not be hiked higher than the period prior to the outbreak of Covid-19

2. The regulations cover the full supply-chain and will limit price increases of suppliers in similar fashion.


Stock-piling:

1. All retailers must take steps to limit the quantity of goods sold to any individual consumer; and a list of basic products will be covered.

2. Retailers must take steps to maintain adequate stocks of basic goods during this period, including for weekends and month-end shopping.

3. There are also provisions to ensure that wholesalers take steps to ensure that there is no stock-piling at the cash-and-carries.

The regulations and directions are based in the first instance on a partnership model that requires retailers and wholesalers to take prudent and responsible steps. The regulations and directions will also allow government to take firmer measures if they become necessary, including setting limits on individual products.

Breaches of the regulations can have serious consequences and some of the penalties in the relevant legislation include penalties of up to R1 million, or penalties up to 10 percent of a company’s turnover, or jail sentences of up to one year.