14 of 2020

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 Newsletter 14 / 24 April 2020

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Online portal to boost access to essential medical Covid-19 supplies

By Donna Slater

As part of the Business for South Africa (B4SA) initiative, and with technical assistance from Tencent South Africa, the South African Medical Technology Industry Association (Samed) has created a live online portal for its member companies to upload details of the Covid-19 supplies and equipment they are able to provide.

Essentially, this becomes a resource for procurement services supporting the health sector’s Covid-19 response. The aim is to give buyers real-time data on stock availability, quality documentation and transparent conditions.

The Samed represents 180 companies that supply medical technology, such as emergency ventilators used in intensive care units and tests, personal protective equipment (PPE), devices and other essential medical products to the South African market.

The critical need for medical technology products related to the Covid-19 response has triggered offers from a large number of companies which have had no previous presence in the South African medical technology market. “It is often difficult to distinguish bona fide suppliers from more opportunistic ventures,” reports Samed.

The organisation notes that there is a very real risk of healthcare providers and ordinary citizens purchasing substandard or counterfeit equipment or products for which warehousing, servicing and other forms of back-up are lacking.

Samed is therefore working closely with the South African Health Products Regulatory Authority to devise ways to manage this risk. Having a dedicated channel for communication and procurement is one aspect of it.

Samed chairperson Avanthi Govender Bester says the portal is an automated process to help facilitate the overwhelming demand for medical essentials, which Samed anticipates will continue for weeks to come.

“Our member companies can update their information continually, and this gives supply chain managers for the health sector a much better picture of the resources available.”

What led to the development of the online platform were increasing concerns about quality of some medical supplies that came to the fore in the weeks since the Covid-19 pandemic reached South Africa.

Since then, an international race has been on to secure adequate supplies of PPE for healthcare workers and essential equipment for treating individuals severely affected by the virus.

However, Samed notes that, while the focus has been on quantities of supplies, questions of quality and performance of products, and fair pricing, are equally important.

Meanwhile, a number of Samed members are supporting the government’s National Ventilator Project (NVP) and gearing up for local manufacture of breathing apparatuses including oxygen gas blenders, and the so-called bilevel positive airway pressure and continuous positive airway pressure machines.

Govender Bester says Samed is encouraging its members to secure supplies. “In view of the global pressures on supply chains, and knowing that this is not easy for our member companies, it assists that all products listed on the portal will be in high demand for a while to come.”

Samed is also engaging with a range of stakeholders to find ways to ramp up local production of PPE and other items. The real-time information about demand and supply generated by the portal will assist in focusing these efforts.

“The Covid-19 epidemic has emphasised the role of medical technology in providing effective healthcare and enabling and protecting healthcare professionals. Our members realise the huge responsibility they have, and we will work tirelessly to strengthen South Africa’s efforts to meet the demand for care and save lives,” she says.  EN

Tribunal approves first consent agreement relating to Covid-19 excessive pricing

Gauteng pharmacy charging excessive prices for face masks during state of national disaster, must donate essential goods to two old aged homes

A Boksburg pharmacy in Gauteng must donate hand sanitizers, surgical gloves and face masks — valued at R25 410.00 — to two old aged homes in its area of business after the Competition Commission (Commission) found it to be charging excessive prices for face masks during South Africa’s state of national disaster and COVID-19 lockdown period.

The pharmacy furthermore agreed to significantly reduce its mark-up on facial masks with immediate effect for the duration of the state of national disaster.

This arrangement forms part of a consent agreement between the Commission and Cilliers and Heunis CC, trading as Centrum Pharmacy. The agreement has been confirmed as an Order of the Competition Tribunal as of Monday, 20 April 2020.

In terms of the agreement, Centrum Pharmacy will:

  • immediately desist from the excessive pricing conduct;
  • reduce its mark-up on facial masks to significantly below that which it conventionally levies on other non-pharmaceutical store items with immediate effect for the duration of the state of national disaster;
  • donate the following essential goods amounting to a total value of R25 410.00 to two old aged homes situated in Boksburg, namely:
  • 500 hand sanitizers (100ml each)
  • 320 items of 3 ply face masks
  • 7 boxes of gloves (one box contains 100 gloves each)

Background

After receiving information, the Commission investigated Centrum Pharmacy’s alleged conduct and found, among others, that the pharmacy’s average mark-up in respect of facial masks for March 2020 was in excess of 100%,  which is significantly above its average mark-up on “non-essential” products that it has maintained over time.

Centrum Pharmacy did not sell facial masks before March 2020. It sourced masks from various suppliers due to the sudden demand and panic-buying brought on by the state of national disaster.

The Commission found that Centrum Pharmacy’s prices charged for facial masks during March 2020 is a contravention of the Competition Act (excessive pricing) and the Consumer Protection Regulations.

The Commission specifically had regard to Centrum Pharmacy’s average mark-up in respect of facial masks for March 2020 compared to its average mark-up on “non-essential” products that it has maintained over time.

The agreement has been confirmed as an Order of the Competition Tribunal in terms of the Competition Act in respect of a contravention of section 8(1)(a) of the Act read together with Regulation 4 of the Consumer And Customer Protection and National Disaster Management Regulations and Directions published in Government Gazette No 43116 on 19 March 2020, as well as the Regulations on Competition Tribunal Rules for COVID-19 Excessive Pricing Complaint Referrals published in Government Gazette No 43205 on 3 April 2020 and the Tribunal Directive for Covid-19 Excessive Pricing Complaint Referrals.

Facial masks fall under the category of ‘medical and hygiene supplies’ in the Consumer Protection Regulations.

A copy of the Order and agreement is available on the Tribunal’s website at https://www.comptrib.co.za/case-detail/9102

Home Choice – dividend declaration

HomeChoice released its 2019 annual results on Thursday, 12 March 2020 when the impact of COVID-19 was primarily focused in China and certain countries in Europe. At the time, the Board considered the declaration and payment of a year-end dividend appropriate as the impact of COVID- 19 was expected to be limited to the importation of merchandise from China, for which the Group had already implemented plans to manage delays in production and delivery.

Subsequent to the dividend announcement, COVID-19 has progressed into a global pandemic and the economic and risk landscapes have changed significantly. The events of the past weeks are unprecedented and the short- and medium-term effects on the local and global economies are significant and uncertain.

The board believes that it is in the best interests of the Group and its stakeholders to preserve cash reserves during this period of uncertainty. The Group has implemented a significant reduction in loan disbursements and has proactively reviewed and deferred capital and discretionary expenditure.

Against this background and in the interest of the continued financial health of the Group, the board considers it prudent to postpone the final dividend of 79.0 cents per share, amounting to R83.2 million, that was payable on Monday, 25 May 2020.

Accordingly, shareholders are advised that the dividend declaration timetable released on Thursday, 12 March 2020 is hereby retracted. Information on the revised timetable will be communicated to shareholders on or about Monday, 24 August 2020, when HomeChoice plans to release its interim results for the half-year ending 30 June 2020.

Woolies – change to the company’s credit rating

Senior Unsecured Floating Rate Noteholders are advised that Standard & Poor’s Global Ratings (“S&P”) downgraded the credit rating of WHL with effect from 15 April 2020. The event-driven rating action, prompted by the effects of COVID-19 and the South African Sovereign ratings downgrade, has resulted in the credit rating being revised from ‘zaA+’ to ‘zaA- (Credit Watch Negative)’ on a long term national scale basis.

Massmart – integrated annual report and AGM notice

Massmart shareholders are advised that the Integrated Annual Report of the Company for the year ended December 2019 (“Integrated Annual Report”), which incorporates the audited summary consolidated Group Financial Statements and the notice of the Annual General Meeting, has been made available on our website (www.massmart.co.za). The national lockdown, due to the impact of the COVID-19 virus, has delayed our printing and posting process. As such, the distribution of the Integrated Annual Report will take place once these services have resumed.

The audited consolidated Group Annual Financial Statements contain no changes to the reviewed consolidated results for the financial year ended December 2019 released on the Stock Exchange News Service on 27 February 2020. The annual financial statements are audited by Ernst & Young Inc. whose unmodified report is available for inspection at the registered office of the Company. Notice is hereby given that the Annual General Meeting of holders of all classes of shares of the Company will be held on Thursday, 21 May 2020 at 09h00 at Massmart House, 16 Peltier Drive, Sunninghill Ext 6, Sandton.

The Board of Directors of the Company has determined, in accordance with section 59 of the Companies Act 71 of 2008, as amended, that the respective record dates for shareholders to be recorded as shareholders in the securities register of the Company in order to: (i) be entitled to receive the notice of Annual General Meeting is Friday, 3 April 2020, and (ii) be entitled to attend, participate and vote at the Annual General Meeting is Friday, 15 May 2020. The last date to trade to be entitled to attend, participate and vote at the Annual General Meeting is Tuesday, 12 May 2020.

Sales update for the 13 weeks to 29 March 2020
Massmart’s total sales for the 13-week period 29 March 2020 amounted to R22.0 billion and represents an increase of 1.3% over the prior year, with comparable store sales increasing by 0.9% over the same period. Product inflation is estimated at 2.3%. Total sales from our SA stores for the 13-week period increased by 1.0% over the prior year, while comparable sales increased by 0.6% over the same period. Total sales from our ex-SA stores measured in constant currencies for the 13-week period showed positive sales growth of 4.5% with comparable sales growth also showing a positive movement of 4.4% over the prior year. In Rand terms the positive sales growth on a total basis was 5.0% and 3.5% on a comparable store basis.

Shareholders are referred to Massmart’s SENS announcement issued on 30 March 2020 in which the Group highlighted its response to the current COVID-19 crises as well as the high level of uncertainty this has caused, which complicates meaningful analysis of the Group’s sales trends. Subsequent to the 30 March 2020 announcement a number of other countries in which the Group trades have announced national lockdowns or various trading restrictions. Massmart fully supports national and regional measures to combat the spread of this disease and continues to assess and adapt its responses relative to our customers, associates, stakeholders and business performance. The Group will provide further updates to the market as more clarity is obtained as this crises unfolds. The information above has not been audited or reviewed or otherwise reported on by the Company’s external auditors.

Did you know……..

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