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POOR WILL SUFFER FROM PRICE GOUGING

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The phenomenon, known as price gouging, is not new and has been observed in other parts of the world that have been hit by disasters, and the proactive manner in which our government has responded must be commended. It demonstrates a consciousness about business behaviour and that the State is not going to sit back and watch as it happens.


Prices of essential goods and services rose by no less than four times the price they were preceding the disaster.
The South Africa Competition Commission and the National Consumer Commission are collaborating to deal with cases of price gouging, and have thus far received more than 30 complaints of alleged inflation of prices on essential goods such as face masks, hand sanitisers and toilet paper.


Punishment


They have commenced investigations into some large retailers and pharmacies. Government has warned that those found guilty face severe punishment, including sizeable fines and imprisonment. To complement law enforcement, it may well be that we also need to pay attention to the morality of price gouging. We must have discussions about specific and concrete matters such as price gouging to help shape the debate on who we are.


It has been suggested elsewhere that, after the hardship, suffering and pain caused by COVID-19 globally, we might emerge transformed mentally – more inclined towards compassion, human solidarity and cooperation compared with the dominant self-centredness. I hope this transformation will be widespread.


Lockdown


During his address to the nation about the lockdown, the president said: “I want to make it clear that we expect all South Africans to act in the interest of the South African nation and not in their own selfish interests … I call on all of us, one and all, to play our part; to be courageous, to be patient and, above all, to show compassion.”
This is not the normal free market situation where willing buyers freely elect to enter the marketplace and meet willing sellers, where a price is agreed based on supply and demand. In an emergency, buyers under duress have no freedom. Their purchases of necessities like safe lodging are forced.
It’s greed and there is no virtue in such a business practice. It would also have a disproportionate impact on South Africans due to our different social positions. The low-income earners and the poor would be the most hard-hit by inflated prices.


There have been concerns raised by some retailers and pharmacists that have been accused of price gouging that they had no option but to raise prices because their suppliers had already inflated their prices. Whatever the case may be, we await the outcomes of the investigations by the relevant authorities.
There has been a substantial increase in demand for medical equipment and protective gear, and suppliers have had to scramble to secure such products domestically and internationally.


Complaints


As far as I know, there haven’t yet been any complaints regarding the cost of protective gear except for masks, however, as government has directed, prices will have to be monitored very closely.
Although there is a huge shortage of expensive medical equipment like ventilators domestically and globally, this emergency must not be exploited to such a degree that these products are sold at inflated prices that have no relation to the cost of production.

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