Trade bodies join CMA to warn against price gouging

Trade bodies in the retail sector and the Competition and Markets Authority (CMA) today issued a joint statement, warning a “small number of businesses” who have been raising prices unfairly during the COVID-19 pandemic.

“We remain concerned about the behaviour of a small number of businesses at this time. The vast majority have responded responsibly, but there is a minority who have not,” the statement read.

“Those who inflate prices to profit off the backs of their customers are adding to their distress at a time of particular vulnerability and may be severely damaging their own reputation.”

The signatories to the statement include the Association of Convenience Stores (ACS), Federation of Independent Retailers (NFRN), British Retail Consortium, Association of Independent Multiple Pharmacies, Federation of Wholesale Distributors, Scottish Wholesale Association and Chartered Trading Standards Institute.

As per the latest update from the CMA’s COVID-19 taskforce, the volume of complaints about high prices remains at low levels: an average of 11 per day in June, down from 76 in April.

While the CMA considers the problem as less widespread now, it said today’s warning is aimed at “the minority who are still seeking to profit from the coronavirus outbreak by raising prices.”

Seven in every thousand in England, and two in every thousand in the other nations of the UK have been reported to the CMA taskforce for price increases.

Based on evidence received by the taskforce, the largest price increases, as well as the largest number of price complaints, concern hand sanitiser, with a median reported rise of just under 400 per cent. The average reported increase across all reports, covering products such as paracetamol, flour, meat, toilet roll, rice and eggs is 160 per cent.

The CMA has also urged retailers to report examples where prices are being raised because of increases in supplier costs.

James Lowman, ACS chief executive, said: “The Covid crisis has illustrated just how important local shops are to their customers and communities, and the vast majority of stores have offered new services and coped with operational challenges like implementing social distancing and supply problems without changes to their pricing.

“In a small number of cases retailers across a number of sectors have been accused of increasing prices, and ACS has been pro-active in working with the CMA on a campaign to discourage these practices and to promote retailers telling the CMA when they see this activity from other businesses.”