'Price gouging’ - how some businesses exploited customers during lockdown

Businesses which attempted to profiteer from the coronavirus outbreak have been warned customers may ‘vote with their wallets once this crisis ends’.
Toilet roll is one of the items chiefs say has been subject to the practice known as 'price gouging'.Toilet roll is one of the items chiefs say has been subject to the practice known as 'price gouging'.
Toilet roll is one of the items chiefs say has been subject to the practice known as 'price gouging'.

The peak of the pandemic saw concerns raised about ‘price gouging’, with staple products such as hand sanitiser, paracetamol and bread traded at vastly inflated prices.

And consumers affected have been urged to send any evidence to the Competition and Markets Authority (CMA), a watchdog, which hopes to clamp down on the practice.

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“[Councillors] had concerns certain shops were overcharging for certain items in the early days [of lockdown], like hand sanitiser, toilet roll, eggs, etc.,” said David Ellerington, trading standards manager at Newcastle City Council.

“We would encourage people to write to the [CMA] taskforce, but unfortunately in terms of pricing legislation there aren’t any controls, unless it’s misleading pricing.

“Price gouging is something which could have been caught under the old Prices Act, but that went out of the window quite some time ago.

“It’s been a problem and the government could have legislated on this if they had had the time and justification to do so, but chose not to, although it’s something that may be looked at in the future if we get back to a situation where there’s a lot of exploitation.”

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Ellerington was speaking at this morning’s (Thursday, September 17) meeting of the Tyne and Wear Trading Standards Joint Committee, which was held by videolink and broadcast via YouTube.

As well as customers, retailers forced to hike prices because of increased supplier costs have also been encouraged to contact the CMA.

Evidence against online sellers can also be submitted, if they are based in the UK.

Ellerington also told the panel minimum charges for card transactions may be due to costs imposed on stores by providers of the payment technology.

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Committee chairman Kevin Dodds said: “This is a very important and annoying issue because it seems people are taking advantage of and exploiting a really terrible situation with coronavirus and possibly a similar situation if we end up crashing out of Europe without a deal.

“The government had the chance to introduce legislation to protect people and chose not to.”

He added: “I think we should be encouraging them to do so and to do so as quickly as possible.”

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