As supermarket shelves continue to run dry and staff work frantically to re-stock essentials, you may have noticed on your latest trip to the shops that prices on some items have started to increase. From toilet paper and hand sanitiser to canned goods, some shops have upped the costs amid increased demand due to the coronavirus outbreak.
Although a few dollars or cents may not be too alarming, there have been cases of late where businesses have charged astronomical amounts for goods, while individuals have stocked up on the essentials and are trying to sell them online at inflated prices. Choice reported that there have been cases of face masks being sold for 10 to 20 times their normal price, while hand sanitiser prices have doubled in some stores.
In desperate times, when people are trying their hardest to stay healthy and protect themselves from Covid-19, some people may be willing to pay the extra costs, but is this practice legal? Can authorities crack-down on businesses for price-gouging?
The simple answer is no, price gouging is technically not illegal in Australia. And the Australian Competition Commission (ACCC) can’t prevent or take action to stop excessive pricing, as it has no role in setting prices.
However, if a business makes misleading claims about the reason for price increases, that would be considered a breach of Australian Consumer Law. In some cases, excessive pricing could also amount to unconscionable conduct, which is in breach of the same laws.
According to the ACCC, there is no specific legal definition of unconscionable conduct and it’s determined on a case-by-case basis. But in simple terms, conduct may be unconscionable if its particularly harsh and more than just unfair. As consumer body Choice explained, if retailers charged excessive amounts for products that are critical to the health and safety of vulnerable consumers, it could be a breach of consumer law.
These price hikes, whether they are deemed illegal or not, have angered Aussies, with many taking to social media recently to vent their frustration.
“During this critical time, hand sanitizer [sic] should be distributed to every household for free but here in Australia supermarkets have taken advantage of this situation and increased their prices,” @Im_Rinky wrote on Twitter.
“This toilet paper shortage in Brisbane, Australia is really starting to get stupid,” @JayGee1951 commented. “Who continues to take all the supermarket stock and why? I even notice it being offered on eBay for ridiculous prices. Someone should be gaoled [sic] for hoarding and exploitation.”
The ACCC is currently working with online marketplaces such as Gumtree, eBay, Amazon and Facebook to ensure those platforms are doing what they can to disrupt people who are trying to sell certain items at excessive prices.
In a press conference this week, Prime Minister Scott Morrison said the government was also putting in place arrangements that would make some practices of profiteering illegal. This includes seizing at the border the goods of those who appear to be profiteering by seeking to import or export large quantities of essential items
“Now, it doesn’t relate to normal commercial legal activities, but we have been able to seize at the border – and the Minister for Home Affairs can speak more on this – quantities of material that were seeking to be sent overseas and that is not helping Australia,” Morrison announced.
“That is not consistent with doing the right thing. And they’ll be penalties in enforcement and we’ll be able to seize those, that equipment and that can include medical supplies and include personal protective equipment and that will be seized and redeployed to it’s best use here in Australia.”
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