The AFP raided a journalist’s house.
- Businesses and individuals face five years’ imprisonment for re-selling COVID-19 tests for more than 20% of the original retail purchase price.
- The Australian Federal Police on Friday confirmed it was coordinating with the ACCC to investigate retailers.
- It follows reports from thousands of members of the public about tests being sold for prices as high as $1,000 per test.
The Australian Federal Police (AFP) on Friday confirmed it had launched an investigation into rapid antigen test (RAT) price gouging, after competition watchdog chairman Rod Sims warned it would take action against retailers selling the at-home tests at inflated prices.
Businesses and individuals face five years’ imprisonment for re-selling COVID-19 tests for more than 20% above the original retail purchase price, the AFP said in a release.
The AFP announced two investigations had begun in Queensland and NSW as a result of referrals from the Australian Competition and Consumer Commission’s (ACCC) investigation — which includes a mechanism for public reporting — launched on January 4.
It said it had established a dedicated team to examine the issue.
The AFP said it expected to see more referrals in coming weeks and months, with the investigations coordinated under the AFP’s Taskforce LOTUS, which was established in 2021 as a “targeted and scalable response” to potential criminal threats to the COVID-19 vaccine rollout.
On Monday the ACCC revealed it had received nearly 2,000 reports of tests being sold for as much as $100 per test, despite the tests costing between $3.95 and $11.45 at a wholesale level.
In recent weeks, as cases of the Omicron variant surged in NSW and Victoria, supply of RATs has dwindled, leading prices set by retailers to skyrocket and desperate workers battling to access tests.
The warning from the ACCC follows a change in national testing rules on January 5 that recommended Australians use RATs over PCR tests administered at state testing clinics, in response to clinics running out of tests as they faced overwhelming demand and hours-long queues.
This week the ACCC said it had contacted more than 40 test suppliers, major retailers and pharmacy chains seeking information about their costs, current pricing and stock availability, and reminded them they need to be able to substantiate any claims they make to consumers about the reasons for higher prices.
“We are asking those businesses to urgently explain the prices they are charging,” Sims said.
The ACCC said it was continuing to analyse the information it has received, including more than 1,800 reports from members of the public, reflecting “the continued significant community interest in the pricing of rapid antigen tests”.
It also noted in the statement that in certain circumstances, excessive pricing of essential goods or services may also be unconscionable conduct, a potential breach of the Australian Consumer Law.
Secondary market for RATs emerges
Sims said that at “the extreme end” the ACCC had “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”.
The ACCC said the highest price it had seen advertised was $1000 for a single test.
While Gumtree, eBay and Facebook banned the sale of RATs on their platforms, users continued to surreptitiously place them for sale.
Airtasker also emerged as a popular marketplace for selling and purchasing tests.
The ACCC said pharmacies had come out as the worst offenders in hiking the prices of rapid tests, making up 47% of reports to the ACCC, followed by convenience stores, tobacconists and supermarkets.
However the The Australian Association of Convenience Stores (AACS) warned “reputable retail brands” risked being caught up in the ‘naming and shaming’ of stores price gouging RATs.
Theo Foukkare, chief executive of the AACS, said on Friday the association was working closely with the ACCC to ensure misinformation didn’t tarnish the reputation of retailers following the rules around the sale of RATs.
AFP gains powers to penalise retailers
The AFP said its investigations unit would refer allegations of RAT price gouging to Australia-wide AFP strike teams, which have the powers to force individuals or businesses engaged in price gouging to surrender the RATs.
These kits will then be sent to the National Medical Stockpile, the AFP said, but noted it had not yet seized or surrendered any RATs, PPE or other relevant medical supplies.
Under the legislation, the AFP also has the power to investigate claims of RAT price gouging when a retailer or individual buys RATs from another retailer and sells them with a mark-up of more than 20%.
Nigel Ryan, AFP Assistant Commissioner Crime Command, said there would be zero tolerance for those who were profiteering from RATs at the expense of the Australian public.
“The AFP will use its full powers to crack down on RAT price gouging. Not only is price gouging of RATs unethical but it is illegal, and the AFP will use its significant resources to ensure it protects the public from the unlawful greed of others,’’ Ryan said.
Ryan said the AFP was coordinating with the commonwealth and state on this issue, and would be issuing penalties including jail time and hefty fines.
“Those who breach the law face penalties of up to 5 years’ jail or a $66,000 fine,” he said. “My message is clear. Do not risk jail time or a significant fine for a few extra dollars.”
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