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Hand sanitisers: a booming business 

Will all kinds of businesses flogging hand sanitisers, can consumers trust that the products are effective and fairly priced? 

hand_sanitiser
Last updated: 21 April 2020
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Need to know

  • Mosaic Brands clothing lines Rockmans, Millers and Autograph have all jumped on the hand sanitiser band wagon, and are charging a lot
  • With hand sanitisers in short supply at brick and mortar retailers, where are these online businesses getting their product from? 
  • Distilleries that once made whiskey, vodka and gin are now producing 200,000L of hand sanitiser a week to keep up with demand from critical services 

You may have noticed that online retailers not normally associated with bio-safety are now flogging hand sanitisers like there's no tomorrow.

The questions are: why are these companies selling hand sanitiser, and where are they getting the product from, especially when it's in such short supply at brick-and-mortar outlets that usually sell such items?

On 16 April, Direct Party Discounts, which bills itself as "Australia's #1 party supplies store", was selling 300ml of hand sanitiser for $34.95, or a 3L jug for $129.99.

Also in mid-April, the homepage of packaging supply store Package Puffin, based in Caringbah, NSW, was dominated by a banner advertising sanitiser products (though when you clicked through on Dettol Hand Sanitizer all items were sold out).

Ditto for the 3M N95 face masks that were once apparently available from Package Puffin.

Package Puffin describes itself as a firm that offers "custom packaging and custom printed packaging" for brands and promotional events.

The questions are: why are these companies selling hand sanitiser, and where are they getting the product from?

It designed the cardboard bulk packaging for Snap Shades eyewear, for instance.

We asked Package Puffin why the company had added hand sanitisers to its offerings, and where it sourced its products from.

We have yet to hear back.

Women's fashion – and squeaky clean hands 

One woman who got in touch with us on 12 April said she'd ordered $60 worth of hand sanitiser in early March from Rockmans Emporium, an online women's clothing shop, and was yet to receive the goods.

Another woman who shared her story said she ordered $70 worth of hand sanitiser from Millers (also a women's clothing business) on 30 March with the promise that it would arrive in five working days.

That didn't happen.

Yet another women's clothing business, Autograph, was advertising hand sanitisers, face masks and thermometers on 3 April. The hand sanitiser was going for $59 for a two-pack of 50ml bottles.

We contacted all three clothing businesses to get their side of the story but have yet to hear back.

(All three are owned by Mosaic Brands, the company we outed for COVID-19 panic marketing in an earlier story.)

Smaller businesses are getting in on the action too.

Tasmania-based Willie Smiths, an apple cider company, was selling apple and cherry hand sanitiser made at their cider shed at $80 for a 1.8L jug in recent weeks.

And Wheel and Barrow, the kitchenware chain, advertised its own branded hand sanitiser product in late March, selling a carton of 12 250ml bottles for $155.40.

mosaic-brands-logo

Mosaic Brands clothing lines Rockmans, Millers, and Autograph have been heavily marketing high-priced hand sanitisers.

Price-gouging illegal - but only temporarily 

The dates of these offers are important, because anti price-gouging laws took effect on 31 March 2020, making it a crime to add more than a 20% mark-up to any essential item related to COVID-19 protection. 

(The price-gouging ban includes face masks, hand sanitisers, disposable gloves, alcohol wipes and other products that might prevent the spread of the virus. Toilet paper is not on the list.)

The legislation is retroactive and covers preventive products purchased from 30 January 2020. 

But the legislation is also temporary – it ends on 17 September 2020 unless the Governor-General extends it. CHOICE is calling for a permanent ban on price gouging. 

Are the prices charged by these newcomers to the hand sanitiser market examples of price gouging?

If they can do it safely and with the right quality, it should be encouraged

Craig Brock, policy and public affairs director, industry association Accord

That's not easy to determine, according to Craig Brock, the policy and public affairs director for the industry group Accord, which represents makers of hand sanitisers and other hygiene products.

"The actual increase in demand is quite high," Brock says. "People are buying hand sanitisers and they're using them. It's not a case of hoarding."

A recent survey by Accord revealed critical shortages in raw materials across the industry, particularly ethanol, gelling agents, proper dispensers and other packing materials.

The supply chain is experiencing major hold-ups, and when demand outpaces supply, prices go up, Brock says. That would include the cost of raw materials. 

As for why clothing and other businesses are now selling hand sanitisers, Brock says extraordinary times have shaken up the marketplace across many industries.

Distilleries that normally make ethanol for alcoholic spirits, for instance, have become a significant supplier of hand sanitisers in recent months. 

Any business that has added hand sanitisers to its product range would have to have a couple of things in place, Brock says.

"They would have to be talking to someone who has the ability to manufacture product and have access to ethanol and gelling agents. Imports may be playing a big part in this. There are only two companies that make ethanol in Australia, with maybe a third coming in."

While some long-standing industry players have complained about such companies infringing on their business, Accord's position is that getting as much proper hand sanitiser to as many people as possible should be the priority right now.

"If they can do it safely and with the right quality, it should be encouraged," Brock says.

People have been making their own hand sanitiser in their homes as well, something that is not generally recommended.

Despite advice from medical experts that soap and water is generally the best approach, the shortage of hand sanitiser has become a serious national problem, to the extent that the Minister for Industry, Science and Technology, Karen Andrews, has established a Hand Sanitiser Industry Roundtable (part of the Commonwealth PPE taskforce), of which Accord is a member.  

In response to the widespread shortages, the TGA has said it won't regulate hand sanitisers that have certain specific formulations approved by the World Health Organization (WHO) during the COVID-19 crises.

woman_empty_shelves_coronavirus_covid19

Along with many other COVID-19 related products, hand sanitisers have been hard to find for many consumers.

Distilleries making 300,000 litres a week

Cameron Syme, deputy president of the Australian Distillers Association (ADA), tells CHOICE there are currently 75 craft distilleries around the country making hand sanitisers, producing a total of about 300,000 litres a week.

According to Syme, many are just breaking even or operating at a loss but are eager to keep staff employed and contribute to the cause.

Syme represents the ADA on the hand sanitiser industry roundtable, which meets weekly to discuss "removing unnecessary red tape, gaining access to raw materials and removing blockages to production and distribution of sanitiser," Syme tells CHOICE.

"I'm currently working in my Porongurup distillery seven days a week making high ABV ethanol, which we're getting out into WA," Syme says.

"I was not interested in manufacturing sanitiser – I have 15 years' experience making whisky, gin, brandy and vodka, and 20 years' experience as a lawyer."

We are seeing lots of non-distilling and non-traditional sanitiser companies look at this as a profit-making opportunity

Cameron Syme, deputy president of the Australian Distillers Association 

"However, after I had received the third email from local doctors, including one working at our regional health campus asking us to please make sanitiser, I revisited our position and within a week we were manufacturing WHO-compliant sanitiser and supplying this to five local hospitals in the region, aged care facilities, emergency services, schools, pharmacies and charities."

Syme points out that it's legal to make cosmetic-grade hand sanitiser that does not comply with TGA or WHO guidelines, but these products do have to comply with the Australian Consumer Law (ACL).

"We do hear stories of sub-standard, non-compliant sanitiser on the market, but I am not aware of any Australian distillery producing such a product," Syme says.

"We are seeing lots of non-distilling and non-traditional sanitiser companies look at this as a profit-making opportunity. We can't control that, and as long as our members are all informed and aware of the need to comply with the TGA-exempt WHO formulation, then I'm comfortable with our industry body approach."

Is it legitimate product?

The WHO-approved formulation used by ADA members, Syme says, is 80% ethanol, with hydrogen peroxide, glycerol and distilled or boiled water.

Brock says there's a danger to consumers if upstart businesses making products that are exempt from TGA/WHO guidelines aren't complying with the ACL, whose rules include accurate labelling and instructions.

"A lot of people coming into the market probably don't realise that they have to follow ACCC rules," Brock says. "There may well be some products that aren't meeting the standards."

A lot of people coming into the market probably don't realise that they have to follow ACCC rules

Craig Brock, from industry group Accord

Effective products will need to be at least 70% ethanol, Brock says.

"If the first ingredient is water and not ethanol, then it's unlikely that the product will be effective. People should take a look at that."

It's not surprising that companies whose revenue streams have run dry are looking for ways to stay afloat. 

The issue for consumers is whether hand sanitisers being marketed by such businesses are safe, effective and fairly priced. 

It may be hard to tell in some cases, but there is little doubt that there are incidents of price gouging occurring in the marketplace. 

If you come across one, let us know at newstips@choice.com.au and contact the ACCC

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