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ACCC raises alarm as RAT price gouging continues

Regulator says it has significant concerns about the retail price of rapid antigen tests.

ACCC_price_gouging_rapid_antigen_tests
Last updated: 18 January 2022
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The Australian Competition and Consumer Commission (ACCC) says it has significant concerns about ongoing price gouging on RATs for COVID-19 by some retail stores, as well as online resale websites. 

On Monday, the regulator released a detailed statement addressing the price of RATs, which it says are wholesaling for between $3.95 and $11.45 for a single unit. 

"In the middle of a significant outbreak of COVID-19 in a pandemic, the excessive pricing of rapid antigen tests required to diagnose the illness and protect other members of the public, is of significant concern to the ACCC," chair Rod Sims says.

Any test costing more than $30, even with supply constraints, is almost certainly too expensive

Rod Sims, ACCC chair

"We realise demand and supply-chain issues have impacted since then, but our initial research suggests that a price of around $20 per test or more, however packaged, may be hard to justify based on the average wholesale costs and such retailers should explain why the price is so high. 

"Any test costing more than $30, even with supply constraints, is almost certainly too expensive and would seem to be taking advantage of the current circumstances."

'Obscene' profits

At CHOICE, we've received dozens of messages and tip-offs of RATs being sold for $30 or more at pharmacies and small retail stores around Australia.

Dean Price, our senior campaigns and policy adviser, says people have a right to be disappointed at businesses exploiting a public health crisis to make what he calls 'obscene' profits. 

It's some of the worst price gouging we've seen during the course of the pandemic

Dean Price, CHOICE senior campaigns and policy adviser

"It's some of the worst price gouging we've seen during the course of the pandemic," says Dean. 

"CHOICE is really concerned about these reports that suggest some businesses are engaging in unconscionable conduct when selling these important products during a public health crisis." 

Online markets 

The ACCC says it's received more than 1800 reports from the public about the prices of RATs and that prices on average are now higher than in the earlier days of reporting. 

"At the extreme end, we have received reports or seen media coverage of tests costing up to $500 for two tests through online marketplaces, and over $70 per test through convenience stores, service stations and independent supermarkets, which is clearly outrageous," Sims says.

"There are several businesses that have repeatedly come to our notice thanks to the information provided by the public. We are asking those businesses to urgently explain the prices they are charging."

Biosecurity Act

Earlier in the month, the government designated RATs under the Biosecurity Act. This limits the amount someone can resell the item for to 120% of the retail price they bought it for. This means the mark-up can be no higher than 20% – so a RAT bought for $10 can be sold for no more than $12. 

But that designation applies only to reselling. It does nothing to address the prices being charged by retailers. 

Retailers skirting the rules?

After reports of people selling RATs for inflated prices on their platforms, Facebook Marketplace, eBay and Gumtree have all banned their sale. 

But as recently as Saturday the Sydney Morning Herald reported that the 'gig-economy' platform Airtasker was hosting ads for people offering to home-deliver RATs at largely inflated prices.  

But doing so may be unlawful. Breaching the Biosecurity Act can lead to fines of up to $66,000 or up to five years in prison. The ACCC says it's working with the Australian Federal Police on matters that may be in breach. 

Online marketplaces need to do more to make sure price gouging doesn't happen on their platforms

CHOICE's Dean Price says online marketplaces need to do more to make sure price gouging doesn't happen on their platforms. 

"It is encouraging to see some online marketplaces such as eBay and Gumtree have banned the sale of RATs due to rampant price gouging," he says. "If online marketplaces allow for the sale of RATs on their platforms, they must have the systems in place to ensure that price gouging can't occur." 

According to reports, a number of retail stores have been breaking up larger multipacks of RATs and selling them individually without the instructions included – a practice  the Therapeutic Goods Administration has warned against. 

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