The Competition Commission is investigating Dis-Chem’s Better Rewards programme following a complaint from Health Minister Aaron Motsoaledi.
The commission’s spokesperson, Siyabulela Makunga, told The Citizen that the investigation focuses on determining whether Dis-Chem has violated any provisions of the Competition Act.
According to the competition watchdog, the Competition Act (Act 89 of 1998) governs economic competition. It is designed to promote a fair and efficient economy, ensure reasonable prices and product choices for consumers, and prevent anti-competitive business practices.
The investigation relates to the part of the Rewards programme that provides customers with a 5% discount on front-shop retail products for a 30-day period, only if they have visited Dis-Chem’s pharmacy.
Dis-Chem’s reward programme under microscope
“The focus of the investigation is to determine whether the rewards programme is structured in a way that could potentially restrict or exclude competition within the market, specifically if it has the effect of inducing consumers not to engage with competitors,” said Makunga.
“The affected sections of the Competition Act are sections 8(c) and 8(d).” Section 8(c) of the Act stipulates that “a dominant company is not allowed to use exclusionary conduct, unless it can show that the conduct has strong efficiency or pro-competition benefits”.
Section 8(d) stipulates that it “prohibits dominant firms from engaging in specific exclusionary practices, such as blocking suppliers or customers, refusing to supply competitors, tying products, or selling below cost, unless they can show that these actions deliver efficiency or other pro-competitive benefits that outweigh their harm to competition.”
Preliminary report about Dis-Chem underway
Makunga said the commission has reached out to 13 market participants to collect relevant information.
“Requests for information have been issued to Dis-Chem, nine other retail pharmacies, two pharmaceutical industry associations and the National Department of Health,” he added.
“We are actively engaging with these participants to ensure we have a comprehensive understanding of the alleged conduct.
The commission is currently reviewing the information gathered and is preparing a preliminary report, which will include preliminary findings and recommendations based on the strength of the evidence.”
Full compliance with all applicable legal and regulatory requirements
Dis-Chem told The Citizen it is complying with requests from the Competition Commission and that it “maintains that the relaunched Better Rewards programme was designed to ensure full compliance with all applicable legal and regulatory requirements”.
“In developing the Pharmacy Boost component, strict transaction separation principles were applied to ensure that prescription medicines are sold exclusively at the legislated Single Exit Price (SEP), with discounts applied only to non-regulated retail products.”
“Dis-Chem is complying with requests from the Competition Commission in relation to their investigation into the Pharmacy Boost component.”
Voluntarily participation
The retailer added that participation in the Better Rewards programme, launched in October 2025, is entirely voluntary and does not require customers to purchase medicines from Dis-Chem dispensaries.
“Customers may access programme benefits through front-shop retail purchases, while dispensary interactions serve only to enhance the value of benefits through the Pharmacy Boost mechanism.
“In particular, the Pharmacy Boost component is a public health intervention aimed at improving chronic medication adherence. It was designed to encourage people to fill their scripts, returning value to patients to invest in their health, via enhanced discounts on front-shop retail products.
“The programme encourages consistent treatment behaviour, supporting better management of non-communicable diseases (NCDs) and reducing the risk of adverse health outcomes.”
Programme increases revenue
Most retailers have rewards programmes structured in different ways, in an attempt to “save customers money” while actually making money for the businesses. This was proved in Dis-Chem’s results for the 12 months ended 28 February 2026.
The results released on Friday outlined that “for the 17 weeks since the launch of the Better Rewards programme, revenue increased by 9.6% compared to the corresponding period. Revenue growth of participating Better Rewards brands increased by 12.0%, with volume growth of 18.7%.”
Dis-Chem acknowledged the rewards programme’s role in its financial results for the year.
“Retail revenue increased by 8.8%, supported by the opening of eight pharmacy stores and continued market share gains from Better Rewards, while wholesale revenue to external customers grew by 10.4%,” it said.
“Importantly, the Group’s total income margin increased to 32.0%, highlighting the sustainability of the Better Rewards programme and its role in driving positive operating leverage and future earnings growth.”
