Consumer rights

Price spike in rapid antigen tests continues

The Australian Competition and Consumer Commission (ACCC) says it is very concerned about the continued price hikes of RATs for COVID-19 by some retail stores, as well as online resale websites.

On Monday, the regulator issued a detailed statement on the price of RATs, which it said retail for wholesale between $3.95 and $11.45 for a single unit.

“In the midst of a significant outbreak of COVID-19 within a pandemic, the overpricing of rapid antigen tests needed to diagnose the disease and protect other members of the public is of significant concern to the ACCC,” said Chairman Rod Sims.

Any test costing more than $30, even with supply constraints, is almost certainly overpriced

Rod Sims, ACCC President

“We realize that demand and supply chain issues have had an impact since then, but our initial research suggests that a price of around $20 per test or more, regardless of packaging, may be difficult to justify based on average wholesale costs and those retailers should explain why the price is so high.

“Any test costing more than $30, even with supply constraints, is almost certainly overpriced and would appear to be taking advantage of current circumstances.”

“Obscene” Profits

We at CHOICE have received dozens of messages and reports of RATs being sold for $30 or more in pharmacies and small retail stores across Australia.

Dean Price, our senior campaigns and policy adviser, says people have a right to be let down by companies that exploit a public health crisis to make what he calls “obscene” profits.

This is one of the worst price increases we’ve seen during the pandemic

Dean Price, CHOICE Senior Campaign and Political Advisor

“This is one of the worst price increases we’ve seen during the pandemic,” Dean says.

“CHOICE is deeply concerned about these reports that suggest some companies are engaging in unreasonable conduct when selling these important products during a public health crisis.”

Online markets

The ACCC says it has received more than 1,800 reports from the public on RAT prices and that prices on average are now higher than when the reports began.

“At the extreme, we have received reports or seen media coverage of tests costing up to $500 for two tests through online marketplaces, and over $70 per test at convenience stores, gas stations and independent supermarkets, which is clearly outrageous,” says Sims. .

“Several companies have repeatedly come to our attention through information provided by the public. We are asking these companies to urgently explain the prices they charge.”

Biosafety Act

Earlier this month, the government designated RATs under the Biosafety Act. This limits the amount someone can resell the item for to 120% of the retail price they purchased it for. This means that the markup cannot exceed 20%; thus, a RAT purchased for $10 cannot be sold for more than $12.

But this designation only applies to resale. It does nothing to adjust the prices charged by retailers.

Retailers bend the rules?

After reports of people selling RATs at inflated prices on their platforms, Facebook Marketplace, eBay and Gumtree all banned their sale.

But as recently as Saturday, the Sydney Morning Herald reported that the ‘gig-economy’ platform Airtasker was hosting adverts for people offering to deliver RATs to homes at grossly inflated prices.

But it may be illegal. Violating the biosafety law can result in fines of up to $66,000 or up to five years in prison. The ACCC says it is working with the Australian Federal Police on matters that may be offending.

Online marketplaces need to do more to ensure that price gouging doesn’t happen on their platforms

CHOICE’s Dean Price says online marketplaces need to do more to ensure that price gouging doesn’t happen on their platforms.

“It is encouraging to see that some online marketplaces such as eBay and Gumtree have banned the sale of RAT due to a generalized price hike,” he said. “If online marketplaces allow RATs to be sold on their platforms, they must have systems in place to ensure that price gouging cannot occur.”

According to reports, a number of retail stores split larger multipacks of RATs and sold them individually without the included instructions — a practice the Therapeutic Goods Administration has warned against.