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Proudly SA: Short-term profiteering will cause damage in the long run

Posted on 2020-03-25 00:00:00

Proudly SA: Short-term profiteering will cause damage in the long run

Proudly SA chief executive Eustace Mashimbye on a locally produced couch in his office in Rosebank, Johannesburg. Photos: Philippa Larkin

JOHANNESBURG - Times of crisis bring out the very best and the very worst in humankind. I have heard so many heart-warming stories over the last week since the President shifted gear in the country's response to the coronavirus, of people pulling together, helping each other out, looking after vulnerable neighbours and generally displaying the spirit of ubuntu that defines who we are, that it restores one's faith in humanity.

But equally, there are those who are determined to turn the circumstances in which we find ourselves to their own advantage. These people include those who are hiking the costs of essential goods and services and meeting demand with supply at exorbitant prices. Stockpiling is one of the causes of the disruption in supply chain patterns and can legitimately be a contributing cause of price increases.

The toilet roll example is the most obvious and ridiculous one, but mercifully the run on two-ply seems not to have taken hold and on my last visit to the supermarket, all the aisles in the toiletry section were stacked high with packets and packets of toilet rolls as if mocking those hell bent on buying as many as the shops can sell them.

It is unlikely, fellow South Africans, that we will run out of anything essential for our existence any time soon, so buy only what you need in reasonable quantities.

We also understand that raw material input costs may have increased over the past few months, due to supply challenges linked to factories closing down across the world, leading to repricing policies being introduced by some manufacturers.

Scarcity is always a contributing factor that can legitimately push up prices, but profiteering on items that remain in abundance is immoral.

eBay in the UK has been urged to remove from the site flagrant examples of profiteering by sellers offering items inflated by as much as four times their recommended retail price.

The Consumer Goods Council SA has also asked consumers to report companies who are inflating prices beyond reasonable levels. We don't have to look much beyond social media to find people desperately seeking surgical masks and hand sanitiser with responses offering any quantity they like, if they can afford to pay. I have seen 20ml hand sanitiser going for R30 each, and 25 litre drums for R3500 each.

Last week, Trade and Industry Minister Ebrahim Patel formalised regulations around so-called price gouging.

In an extension to the Consumer Protection Act, Competition Act and Disaster Management Act, penalties of up to R1million, up to 10 percent of a firm's turnover or imprisonment for up to 12 months have been introduced and an email and a hotline set up to report any cases of unfair pricing on a number of essential food as well as hygiene and sanitation related items. (ministry@economic.gov.za or 0800 014 880).

The short-term gains of the few will be at the expense of the long-term losses of the many. As workers across many sectors are put on short-time or even retrenched, no-one can afford to be paying more for grocery baskets with less money.

Now is a time for fair trading on local as well as global markets.

Now is a time to support small local businesses as much as possible within the constraints imposed upon us. We have written before about the need for large corporations to support local if for no other reason than to economically empower those who are ultimately their own consumers with jobs. This is what we need to keep our economy afloat through the coming months.

And consumers have long memories. If you are one of the companies profiteering off the back of the Covid-19 virus which eventually will pass, consumers will still need toilet paper and the other things you are ripping us off with when all this is over.

Those companies that stepped in to help keep us all safe will be remembered and those who conspired to make themselves rich will also be remembered. And guess which ones will have earned customer loyalty?

At a critical time such as this, we all have a role to play to contribute positively to the well-being of everyone living within our borders.

The Simunye Male Chorus' Impilo Yam asks for help in preserving their lives, and our plea is that we all do the same, including in our business practices.

Eustace Mashimbye is the chief executive of Proudly South African.


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