ACCC concerned over pricing of rapid antigen tests

Monday, 17 January, 2022

ACCC concerned over pricing of rapid antigen tests

The Australian Competition and Consumer Commission has expressed significant concerns about the retail price of rapid antigen tests, reportedly often costing between $20 and $30 per test and sometimes over $70 a test through smaller retail outlets, despite wholesale costs ranging between $3.95 and $11.45 a test.

These concerning practices emerged from the ACCC’s initial analysis of information so far received from the public, suppliers and retailers about the cost and prices of rapid antigen tests across the country.

The ACCC is continuing to analyse the information that includes more than 1800 reports from members of the public, reflecting the continued significant community interest in the pricing of rapid antigen tests.

Currently, the prices reported are higher than in the initial days of reporting.

“At the extreme end, 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 through convenience stores, service stations and independent supermarkets, which is clearly outrageous,” ACCC Chair Rod Sims said.

“There are several businesses that have repeatedly come to our notice thanks to the information provided by the public. We are asking those businesses to urgently explain the prices they are charging.”

The ACCC has contacted more than 40 test suppliers, major retailers and pharmacy chains seeking information about their costs, current pricing and stock availability, and reminding them they need to be able to substantiate any claims they make to consumers about the reasons for higher prices.

Information received from suppliers and retailers

The ACCC has written to suppliers and retailers about their costs and retail sales prices and is considering the responses received so far.

“The supply chain is often complex, with several businesses involved from the initial supply to the retail sale of tests to consumers. Retailers operating under the same brand or chain may be setting prices and selling tests independently of the other stores in the chain,” Sims said.

“This means the wholesale and resulting retail prices can vary significantly.

“Our inquiries so far confirm that a large number of orders have been placed. However, given delays in the supply of tests, or test parts, into Australia, delays in distribution due to COVID illness or isolation requirements within workforces and at the retailer level, there is significant difficulty forecasting accurate supply,” Sims said.

There is a range of different tests and different pricing, and a number of factors influencing wholesale price including the size of the order and supply channel used. On the data available so far, suppliers and intermediate suppliers report wholesale prices of between $3.95 and $11.45 per test, depending on the type of test and volumes purchased.

Consumers continue to raise concerns about prices

The ACCC has received over 1800 reports from consumers about rapid antigen tests since 25 December 2021, rising after our media statement earlier this month, and now averaging close to 150 reports a day.

The ACCC’s initial analysis shows increasing sales by service stations and convenience stores. These channels have now become a common source of the pricing issues consumers have reported to the ACCC.

“We are looking in particular at reports of single tests being sold at around $30 or above from certain stores. For example, such sales have occurred from a number of King of the Pack and Metro Petroleum stores (70 and 40 complaints respectively). However, I want to emphasise the complaints are limited to a small number of individual stores in these chains and the majority of stores in those chains have not been the subject of complaints to us. We are writing to those traders to validate the reports and asking them to explain their prices so we can work out what’s going on,” Sims said.

“We are also aware of other individual traders named in media and social media reports and will be engaging with those that give rise to concerns.”

Most reports received by the ACCC are about businesses selling tests in New South Wales. More than 90% of reports received by the ACCC relate to the prices of the tests.

The ACCC is also continuing to investigate potential scams after receiving increasing reports of online stores wrongly accepting payment, meaning the stores did not intend to supply the tests or knew, or should have known, that they would not be able to supply the tests in a timely manner.

Price gouging under the Biosecurity Act determination

The ACCC is working with the Australian Federal Police (AFP) on matters that may be a breach of the determination under the Biosecurity Act introduced by the government recently, which came into force on 8 January 2022 and will remain in place until 17 February 2022. The determination prohibits a person from reselling, or offering to resell, rapid antigen tests bought at retail level for mark-ups above 20%.

“We will continue our investigations and analysis of information from consumers, retailers and suppliers, and will provide further updates in coming weeks,” Sims said.

While suppliers are generally able to set their own prices, businesses must not make false or misleading statements about the reason for high prices.

In certain circumstances, excessive pricing of essential goods or services may also be unconscionable.

Businesses must also set their prices independently of their competitors and not collude about pricing.

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