Namibia: COVID-19 Profiteers Unmasked ... Commission Has Clear Evidence of Price Exploitation

As Namibia and the rest of the world have been grappling to deal with the prevailing Covid-19 pandemic, the prices of certain products in the country have increased by as little as 14% while some have gone up by as much as 100%.

In this regard, the Namibian Competition Commission (NaCC) has over the past four to five weeks received numerous complaints from the public about these astronomical increases in prices of various products.

Using price movement analysis, the commission says it has clear evidence of price exploitation, which has placed undue pressure on consumers, particularly on lower income groups.

While the commission will investigate all charges, it will prioritise prices escalations of essential products, some of which have been unaffected by supply chain challenges and are therefore not subject to supply shortages.

"It should be emphasised that complaints regarding essential products will be afforded more priority than the rest of the complaints. Of all the number of the complaints received 81% related to the essential goods category with the remaining 19% relating to non-essential products,"

read a statement issued this week by the commission's spokesperson, Dina Gowases.

Overall, Namibian consumers have indicated they are now paying significantly more for products considered to be essential. Specifically, the NaCC observed that the price of face masks, hand sanitisers and immune boosting products such as oranges, naartjies and raw ginger all saw huge price increases.

According to Gowases, the bulk of the complaints (39%) originate from the Khomas region while the //Kharas region accounts for 29% of the complaints.

The Oshana region accounts for 10% of the complaints, Erongo and Zambezi each account for 7% and the rest of the regions account for the remaining 8%. Close to 40% of the complaints relate to price increases for food and basic consumer items such as fruits and vegetables, rice, maize meal, baby formula, dairy products, 25% relate to transport, construction, accommodation, furniture, household appliances and motor vehicle parts. According to the commission, 13% are in respect of health and hygiene products such as immune boosters, hand sanitisers and face masks and 24% to products or services which were not specified by the complainants. A breakdown of the retailers indicate that 36% of all complaints received are against Spar Supermarkets, 21% against OK Foods Stores, 15% against pharmacies (including Dis-Chem), while 13% of the complaints are against Pick n Pay, followed by Clicks, Shoprite-Checkers and Woermann Brock which each account for 5% of the complaints.

"It is important to note that the competition commission does not possess direct consumer protection powers, however, due to the absence on an adequate consumer protection legislation framework in Namibia, remedies to the prevailing price gouging practices must be adopted under the Competition Act, where legally permissible. It is for this reason that the commission has over the past five weeks made attempts to have price regulations published in order to complement its current powers under the Competition Act and enable quicker and more effective redress to the ongoing price exploitation complaints," Gowases explained.

The NaCC continues to work closely with relevant stakeholders such as Ministry of Industrialisation and Trade, Office of the Attorney General and the Ministry of Justice in order to introduce a legal mechanism to address price exploitation during the prevailing Covid-19 outbreak.

"This process has unfortunately taken much longer than anticipated, but the commission remains confident that consensus will soon be reached amongst the relevant stakeholders that will lead to the publication of the requisite price directives which are ultimately aimed at curbing price exploitation and price gouging practices," said Gowases.

She continued that in the interim, the commission is currently assessing the veracity of the various allegations and is further gathering additional information in respect of all complaints.

"The commission will in due time make a decision to proceed with formal investigations against those implicated with due regard to the procedure set out in the Competition Act and the envisaged price directives. The commission cautions that receipt of complaints does not imply that the undertakings involved are guilty of price exploitation or excessive pricing under section 26 of the Competition Act. Further, at this stage no formal investigations have been initiated against any of the above-named retailers," Gowases added.

Consumers are however, urged to continue filing their complaints with the commission.

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