UK retailers face probe into Covid price profiteering

The UK competition watchdog has launched a probe into whether retailers have been overcharging for hand sanitiser products following complaints from consumers forced to pay over-the-top prices for essential products in the pandemic.

The Competition and Markets Authority said on Friday that an investigation into potential profiteering from hand sanitiser sales would look at four pharmacies and convenience stores in the UK. It said the probe was at an early stage and did not name the companies involved.

Last month, the CMA said it had written to 264 companies, accounting for more than 3,100 complaints, about price rises for essential products.

Consumer rights campaigners have called for a crackdown on unscrupulous sellers who have charged high prices for products needed to protect people during the crisis, both online or on the high street. 

Customers have complained about price rises for various products, from masks to groceries, but hand sanitisers have been found to have had some of the biggest mark-ups.

The move comes as people and companies are coming under renewed pressure to use personal protective equipment as the lockdown loosens, with masks needed on transport and hand sanitiser required to enter many buildings.

This is the first intervention into excessive pricing or price gouging case resulting from the pandemic, according to Matthew Hall, a competition lawyer at McGuireWoods, the law firm. “This looks like a warning shot to small retailers with a dominant position in local areas,” he said.

The CMA said last month it was looking at companies that were charging excessive prices or making misleading claims about the efficacy of protective equipment. It also asked the government for emergency time-limited legislation to chase retailers that were profiting unduly from the crisis.

From March 10 to May 17, the CMA was contacted more than 60,000 times about coronavirus-related cases, although the majority were about unfair practices in relation to cancellations and refunds from holidays and airlines. The CMA has also started to investigate whether these companies are breaking the law. 

The CMA received 21,000 complaints between March 10 and April 19 related to Covid-19, with the average price increase about 130 per cent. For hand sanitisers, this rose to an average of 367 per cent. 

Since early April, the number of complaints about price rises has fallen, but it said that the “necessary restrictions on businesses and people continue to present significant risks that prices are raised above justifiable levels for a number of essential products”.

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