ACCC probes price gouging on face masks

Australian businesses cashing in on coronavirus panic have been put on notice.

A worker in China packages face masks at a factory in Handan. Picture: AFP

Australian businesses cashing in on the coronavirus panic have been put on notice, with the corporate watchdog launching an investigation into price gouging.

Businesses have reaped the benefits of soaring demand for health and safety products, with the price of N95 face masks and hand sanitiser rising exponentially over the past three months.

Ten-packs of 3M-branded respiratory masks are selling for $423 on healthcare and pharmacy website Livingstone, while 500ml bottles of hand sanitiser are being sold for $75 on Amazon. Amazon warned that “bad actors” would be blocked or removed from its website.

“There is no place for price gouging on Amazon. We are disappointed that bad actors are attempting to artificially raise prices on basic needs products during a global health crisis and, in line with our longstanding policy, have recently blocked or removed tens of thousands of offers,” an Amazon spokesman said.

The huge demand for both products has made them increasingly hard to come by, with retailers selling out as soon as they receive stock. Livingstone said price increases were in response to “scalpers” who were depleting stock and selling the products for a profit.

The Australian Competition & Consumer Commission said it was unable to comment on potential investigations.

“Businesses must not make false or misleading claims about the reasons for an increase in the price of a product and must not co-ordinate price changes with competitors,” a spokesman said.

The significant demand for respiratory masks is despite health experts advising they aren’t necessary in Australia due to the rare chance of contracting COVID-19.

The national toll stands at 28, after five new cases were reported over the weekend. On Sunday, James Kwan became the first Australian to die from the outbreak.

While most retailers have kept pricing stable, several online retailers and distributors have responded to the outbreak by significantly raising their ­prices.

On Monday afternoon, workplace safety retailer Seton was charging $64.13 for a single 3M P1 respirator mask, while WorkSafeGear.com.au was advertising three-packs of P2 N95 masks for $99.95.

The wholesale price ranges from $2.50 to $5. Neither company responded to requests for comment.

While price gouging isn’t strictly illegal, it is believed the ACCC may be investigating whether consumer law was being breached by retailers’ “unconscionable conduct”.

Australia’s chief medical officer, Professor Brendan Murphy, last month said there was no need for Australians to wear face masks. US surgeon-general Jerome Adams over the weekend vented his frustration at the run on face masks saying they were “not effective” in preventing the general public from catching coronavirus but shortages could put healthcare workers “at risk”.

Woolworths chief executive Brad Banducci last week told The Australian the outbreak and spread of the coronavirus was fuelling strong demand in his stores for personal hygiene products, including hand sanitiser, particularly those that people could carry with them.

“We have just seen demand go through the roof,” he said.

“And just keeping up with demand on these very specific items is something we need to focus on and get sorted.”

Pharmacy retailer Chemist Warehouse has been regularly selling out of face masks and, like a range of other chemist chains, was facing dwindling stocks of sanitisers and disinfectant wipes.

Additional reporting: ELI GREENBLAT