Cape Town — Greedy service providers who were "unduly" inflating their prices in anticipation of a World Cup bonanza were sending a signal of exploitation to the wider world and doing long-term damage to the country, Finance Minister Pravin Gordhan said yesterday.

He was speaking after this week's Cabinet meeting noted concerns about pricing for the World Cup. There have been increasingly frequent reports of exorbitant prices being charged, particularly for air fares and property rentals.

Chief government spokesman Themba Maseko told a post-Cabinet news conference that the Cabinet meeting had "expressed concern about the ill-advised move by some business establishments to increase their prices ahead of the Fifa World Cup in anticipation of making mega- profits".

He said the Cabinet called on South Africans to resist the temptation to "unduly inflate" prices ahead of the tournament because it would hurt future tourism.

Gordhan, responding to a question as to what was meant by "unduly inflate", said the message to businesses was that they should be reasonable and sensitive and not turn "short-term gain into long-term losses". South Africans should be friendly, hospitable and charge fair prices for their services, he said.

He and Trade Minister Rob Davies said that to be sending a message of exploitation was not correct and the risk was that visitors would resist making bookings in the face of the high prices, and this would then drive prices back down, "but by then it could be too late". Gordhan said the long-term aim of establishing SA as a tourism destination of choice could be harmed.

Davies said any suggestion of collusion in setting inflated prices would warrant the attention of the competition authorities.

Maseko concluded: "The minister of tourism has commissioned a survey to look at the pricing structure in the tourism sector ahead of the 2010 Fifa World Cup. This study will identify the extent of the problem and make recommendations about possible steps that could be taken in this regard. A report will be submitted to Cabinet shortly."

Referring to ticket sales and reported fears that they were unusually slow, Gordhan said that in the previous World Cup, in Germany, there was a late surge in ticket sales and that "there is no need to panic".

In response to a question about the Zakumi debacle, where an African National Congress MP had won the contract to manufacture the local World Cup mascot and then got a Chinese company to do the work, Davies said that the contract was a Fifa matter and had nothing to do with the government. The Chinese Zakumi connection was terminated by Fifa earlier this week.

Davies said it was the policy to use local manufacturers as much as possible and Fifa had also been engaged to do the same. The issue around the Zakumi mascot was "regrettable", he said.

Davies concluded with the reminder that South Africans should not rip off foreigners as they would lose out in the long term and damage the country's reputation.