Competition watchdog finds grocer made R23k in excess profits on ginger during lockdown

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Fruit Stop has agreed to cap its raw ginger prices
Fruit Stop has agreed to cap its raw ginger prices

Fruit Stop’s Wonderboom branch in Pretoria has reached a consent agreement with the Competition Commission, following its finding that the store had inflated the price of its raw ginger during the Covid-19 lockdown period in 2020.

The agreement follows an investigation by the commission which found that between April and June 2020, Fruit Stop had overcharged consumers for the ginger and made "excess profits" of R23 110.

As part of the agreement, over three months, Fruit Stop will donate essential goods like vegetables, fruit and groceries, valued at R23 110, to Amadea Safe House, a Pretoria-based community organisation.

The grocer will place an agreed-to profit limit on raw ginger prices, for the period of South Africa’s Covid-19 national state of disaster. It will also create and monitor a competition compliance programme.

Despite the agreement, Fruit Stop is disputing the commission’s finding that it charged excessive prices for raw ginger.

Fruit Stop is not the only company that has been in the crosshairs of competition authorities for product price inflation, since South Africa went into lockdown in 2020.

In March this year Pick n Pay became the first retailer which agreed to put a cap on its gross profit margin for garlic and ginger amid a probe into surging prices at several retailers.

Pharmacy retailer Dis-Chem was fined R1.2 million in 2020 for price gouging on surgical masks.

* This article has been amended to clarify Pick 'n Pay's agreement with the Competition Commission. 

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