ACCC cracks down on RAT pricing

With the Omicron variant spreading throughout most of Australia at the start of 2022, the Australian Federal government has been faced with pressure to solve issues of accessibility and pricing of Rapid Antigen Tests (RATs).

These issues have been exacerbated by opportunistic pricing by some retailers.

The Australian Competition and Consumer Commission (“ACCC”), in a recent media release, raised significant concerns over RAT pricing, acknowledging that retail prices have surged to $20-30 per test (and, in some cases, up to $100 per test) despite wholesale costs remaining relatively stable at between $3.95 and $11.45 per test.

Price gouging is not prohibited under Australia’s competition laws although our consumer protection laws do regulate conduct that is unconscionable. While, the ACCC’s initial response indicated that a “name and shame” approach would be adopted, it has now taken a tougher stance, pointing out that in certain circumstances, excessive pricing may amount to unconscionable conduct under s.21 of the Australian Consumer Law (“ACL”). This is in addition to potential liability for any misleading or deceptive representations made about the reasons for the huge markups. The ACCC is also on the lookout for any collusive behaviour on the part of retailers or distributors, whether by way of output restrictions or price fixing. Given the ACCC’s request for those with evidence of anti-competitive conduct to come forward, it would appear that the ACCC considers this to be a significant risk.

The ACCC has also identified other concerns, including:

  1. Retailers failing or refusing to provide receipts or providing incorrect receipts, potentially in contravention of s.100 of the ACL.
  2. Concerns over bundled testing kits being repackaged or split for individual sale. This issue is also being considered by the Therapeutic Goods Administration (TGA) and the ACCC is working closely with the TGA.

The Federal Government’s own response to reports of price gouging has been to implement a determination pursuant to the Biosecurity Act 2015 which prohibits the resale of RAT tests bought at the retail level for mark ups in excess of 20 percent. Penalties include up to five years imprisonment, a fine of up to $66,600, or both for anyone found to be selling RATs at more than 120 per cent of the price for which they were purchased. The ACCC acknowledges in its latest press release that it will work with the Australian Federal Police in relation to breaches of the determination.

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