CMA Investigating Possible Overcharging for Hand Sanitiser

On 18 June 2020, the Competition and Markets Authority began an investigation on the alleged disproportionate and unfair prices of hand sanitiser during the COVID-19 pandemic.

The investigations have been launched under Chapter II of the CA98 into suspicious possible breaches of competition law by four pharmacies and drug stores. The competition law breach allegations should not be taken as fact just yet, as the investigation is still in the early stages. 

The pandemic has created rapid changes for the economy and challenges for the public. As things evolve, some businesses may have attempted to exploit the situation.

However, the CMA has created a COVID-19 taskforce to help protect people from businesses that take advantage of the pandemic by charging excessive prices.

In a statement made in March, the CMA warned businesses to behave responsibly and not exploit the scares of the pandemic to create excess profits or make exaggerated claims about products. 

“This is obviously a time when we all have to behave responsibly to protect our fellow citizens, and particularly those who are most vulnerable,” CMA Chief Executive Andrea Coscelli said. “We urge retailers to behave responsibly in the exceptional circumstances of the COVID-19 outbreak.”

The taskforce plans to scrunitse markets to pinpoint harmful sales, enforce punitive action for breaches of competition law and advise the government on emergency legislation, among other things. The CMA’s job is to ensure that no business takes advantage of the public by capitalising on the current situation.

The taskforce is ready to examine any evidence of competition law breaches.

“We will do whatever we can to act against rip-offs and misleading claims, using any or all of our tools; and where we can’t act, we’ll advise government on further steps they could take, if necessary,” CMA Chairman Lord Tyrie said.

During the coronavirus pandemic, hand sanitiser sold out of stores quickly in the U.K. The competition watchdog will be investigating four unidentified convenience stores and pharmacies for possibly overcharging for hand sanitiser.

Hand sanitiser has been previously found to be a target of price surges. In May, Marks & Spencer was accused of selling hand sanitiser at double the cost compared to equivalent products in other shops. 

Elaine Hanan, a Marks & Spencer shopper, questioned the shop’s virtue, according to The Guardian.

Hanan to Twitter to make her feelings known: “I have to say I am in shock. I was delighted to see hand sanitiser…took two, one for me and one for my daughter with a seven-week-old baby. Thought bill was high – so checked when home to find you charged £11.50 for ONE hand sanitizer. Where is the integrity?”

The CMA has lobbied for creating stricter laws for inflated prices during the pandemic.

The COVID-19 taskforce claims it was contacted 60,000 times between 10 March and 17 May due to coronavirus complaints. The CMA sent 187 warning letters to firms regarding 2,500 complaints about excessive costs for food and personal hygiene items, including hand sanitiser. 

Not surprisingly, the most complained-about issue is the large increase in the price of hand sanitiser. The cost of hand sanitiser shows a median rise of 367%, according to The Guardian. The CMA’s attempt to confront potential price gouging has not only taken place in convenience stores but also on websites such as Amazon and eBay.

The CMA is still unsure if there is sufficient evidence of competition law infringement for it to make a statement of objections to any of the drug stores or pharmacies under investigation. The new investigation is still underway. 

Have you been a victim of price surges during the pandemic? Do you think the CMA is doing enough to prevent businesses from exploiting the public during the health crisis? Let us know in the comments.

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