As South Africa’s economy buckles under the lack of power with its growth being decimated, allegations of price gouging relating to solar and wind renewable energy product have emerged.
In response to a “Business Report” media enquiry, Siyabulela Makunga, the spokesperson of the Competition Commission, said last week that as at April 13, 2023, the Competition Commission had received three complainants relating to solar and wind renewable energy products.
He said one complaint in May last year related to wind renewable energy, but this was non-referred by the commission.
“The other two cases are currently under investigation. These complaints related to price gouging allegations and the exchange of competitively sensitive information between competitors,” Makunga said.
The Competition Commission is a statutory body constituted in terms of the Competition Act, No 89 of 1998 by the government of South Africa empowered to investigate, control and evaluate restrictive business practices, abuse of dominant positions and mergers in order to achieve equity and efficiency in the South African economy.
The commission said it urged consumers, industry players or any person with information concerning allegations of excessive prices or any other conduct relating to a breach of the Competition Act in the energy sector, to approach the commission with that information.
A complaint may be lodged formally with the commission by completing and sending a complaint form to ccsa@compcom.co.za or email ccsa@compcom.co.za, Makunga said.
Fred Makgato, CEO of the Franchise Association of South Africa (Fasa), said on Friday that their code and membership were based on ethical conduct and fair business practices.
“The conduct of price gouging goes against the basic tenets of Fasa’s existence. We will obviously be disappointed if the allegations are proven to be true,” Makgato said.
Fasa said it encouraged its members to source alternative energy supplies as Eskom’s inability to provide reliable power in South Africa would not be solved soon.
“Solar and wind renewable energy are immediate power supply solutions. Alternative energy solutions are supposed to provide businesses with normal or at least maximum trading hours and improve on other trade margins.
“However, the alleged conduct will be counter-productive as it will erode trade margins due to increased prices of such products. It is proven that when power supply costs increase, the burden thereof is passed down to consumers. In this case, consumers will bear the brunt of the alleged gouging conduct by paying more than what is the market price of goods,” he said.
Makgato said should the entities committing wrongdoing be found guilty, should those entities belong to professional or business associations, their membership should be cancelled or terminated.
“The (Compettion Commission) fines do not seem to be deterring businesses from engaging in such conduct,” Makgato said.
Fasa said the surfacing of such allegations at a time when Eskom had implemented rolling blackouts at Stage 6 made the situation very difficult as businesses needed to trade.
“The power supply issue will form part of our broader discussion with the Department of Small Business Development as we are looking at forming collaborations with the department on various franchising aspects,” Makgato said.
Last month, the South African Photovoltaic Industry Association (Sapvia) said South Africa had been seeing anecdotal accounts of solar panel shortages in the country, largely contained to residential and small commercial installations.
Sapvia said the market forces of supply and demand should even out within the next couple of months to ease the supply shortfall. It said the only bottlenecks facing the importation of solar panels were shipping and logistics.
Safeera Loonat, a partner and head of Energy and Natural Resources at KPMG, previously told “Business Report” that the solar panel shortages in South Africa might lead to a price increase on the available products, with the impact of this more likely to be felt by smaller businesses as well as medium and lower income households as they would be unable to afford alternative energy solutions.
BUSINESS REPORT