“Unscrupulous practice of price gouging must stop,” urges industry roundtable on COVID-19
18 Jun 2020 --- UK industry stakeholders, guided by Chartered Trading Standards Institute (CTSI), are calling for an end to “unscrupulous price gouging,” amid the COVID-19 pandemic. On the issue of price rises, the consortium flags that 264 traders that have collectively been the subject of over 3,100 complaints about unjustifiable price rises. This is particularly relevant, as retail outlets across the UK have begun reopening in recent days.
“It’s unacceptable for consumers to be left at the mercy of unscrupulous sellers that are price-gouging during the COVID-19 crisis and regulators must be empowered to take swift action to ensure this practice is stamped out. It is imperative we learn from this experience and ensure people are protected and that the prices of essential items stay reasonable during crises, both now and in the future,” asserts Sue Davies, Head of Consumer Protection at Which?, among the UK organizations that participated in roundtable discussions.
Participating organizations include Money Saving Expert, Resolver, The British Retail Consortium (BRC) and the Competition and Markets Authority (CMA).
While most businesses are acting honestly to help supply their communities with essentials, there are those who seek to take advantage of consumer needs for certain foods, among other goods, the industry bodies stress. There is a concern that, while reports of price gouging appear to have decreased, the practice could ramp up as shops start to reopen.
They further note there is also the possibility that as the pandemic continues, new types of products could be required by consumers on a large scale, and these may become the focus for future, unjustifiable price increases.
In March, the CMA set up a COVID-19 Taskforce to monitor and respond to competition and consumer problems arising from the pandemic. In its most recent public update from the Taskforce, the CMA confirmed that, since mid-April, the large majority of complaints received have been about unfair practices in relation to cancellations and refunds.
It has found that the most complained about product is meat, followed by hand sanitizer, toilet paper and rice. The largest price increases concern hand sanitizers, with a reported median rise of just under 400 percent. The average increase across all reports is 160 percent.
The CMA is also collecting further evidence, including price rises further up the supply chain. Where there is evidence that competition or consumer protection law may have been broken, it will take enforcement action as appropriate.
As the major retail trade body, the BRC condemns price gouging which is undertaken by a very small minority of traders. Reputable retailers have been one step ahead to ensure consumers can get access to the products they need during lockdown. The challenges have presented a huge opportunity for retailers of all sizes to establish a reputation for good customer service going forward and price gouging can only harm those that engage in it.
“It is alarming that there are some businesses exploiting consumers at this vulnerable time. Business owners who inflate prices unjustifiably may well receive short term profits, but in the longer term are severely damaging their reputations,” says CTSI Chief Executive, Leon Livermore.
“Businesses have the opportunity to win over consumers and get long term loyalty by trading fairly with the needs of consumers during the pandemic at heart. UK consumers will remember the profiteers, and I have no doubt they will vote with their wallets once this crisis ends,” he concludes.
For more pandemic-related industry updates, readers can visit our new daily news feed entitled “COVID-19 updates” for relevant insights needed to guide your business through this challenging period.
By Benjamin Ferrer
