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Why we still need action on price gouging

Today, we’ve published our analysis of 1,500+ submissions to our price gouging reporting tool, and the results are concerning. Are you still spotting price gouging?

We launched our campaign against price gouging after finding hundreds of listings for products such as hand sanitiser and cleaning products at vastly inflated prices – sometimes ten or more times their RRP – on online marketplaces.

After hearing from hundreds of you on social media and Which? Conversation about your experiences, it was clear that unscrupulous sellers both online and in bricks-and-mortar stores were taking advantage of the crisis to make a quick profit – and that they continue to do so.

We decided to launch a tool to make it easy for people to report examples directly to us, which we would share with the Competition and Markets Authority (CMA).

Struggling to get essentials

Today we have published our analysis of the 1,500+ submissions we have received so far. The figures paint a worrying picture about how people across the UK have struggled to get the essential items they needed during the coronavirus crisis.

Read all the latest COVID-19 news and advice on our dedicated hub

More than a third (36%) of people said that they have been forced to pay sky-high prices to get hold of essential hygiene and medical items – products which made up almost half (46%) of all submissions.

The average price difference for hygiene items was a staggering 414%.

We’ve been calling on the government to introduce emergency legislation to tackle price gouging during this pandemic and in future crises.

Our recommendations would give the CMA the power to clamp down on proven instances of price gouging of essential items necessary in a crisis, and also provide clear information to businesses about what price increases would be considered justifiable.

We believe that if such action had been taken earlier then thousands of people who are vulnerable, self-isolating, or essential frontline workers could have been saved from paying extortionate prices for products such as hand sanitizer, paracetamol and face masks.

Instead, the CMA has only been able to begin to take action against just four pharmacies at the end of June, rather than tackle the problem at the beginning of the crisis when our research showed price gouging was widespread.

Lagging behind other countries

Similar powers already existed, or were introduced in response to coronavirus, in countries around the world – including Canada, Japan, and the USA.

These countries have seen similar incidents of price gouging on certain items, but have been able to take action much more quickly than the UK. For example:

🇨🇦 In Canada, an individual may face a fine of up to CAD 100,000 and up to a year imprisonment, while corporations may be fined up to CAD 10 million.

🇬🇷 In Greece, the Development Ministry issued fines totalling €113,500 between 24 and 26 March for profiteering.

🇺🇸 In the USA, an executive order was passed at federal level on 23 March to invoke the Defence Production Act. This was in addition to existing laws in numerous States which outlawed price gouging during an emergency.

Action to prevent rip-offs

We’re concerned that price gouging is still continuing, and that a possible second spike in infections could leave people trying to stay safe being ripped off yet again.

It’s vital that the government takes action now and works to protect people during this and future emergencies, and does not allow any sellers from continuing to profiteer from a crisis.

Thank you so much to those of you who have shared your experiences and examples with us so far.

If you’ve spotted continued examples of price gouging, please do carry on reporting them via our tool.

Comments

Chris – It would be interesting to read the analysis. Is it available?

Thank you, Chris. I have printed it for later reading. Thanks for adding a link to it in the Intro to the Conversation.

On first sight the article looks more like a summary than an analysis but it will be interesting to see what happened. Whether anyone was ever “forced” to buy anything and thus overpay will be worth considering in guiding future policy. Pricing is often the only mechanism through which shortages can be managed. In my experience all ‘essential’ medical products are available on prescription.

Chris – I have now read the article on price-gouging and make the following remarks –

1,500 people used the Which? reporting tool in the space of about six weeks, which is quite a useful sample size, but, naturally, they were all people who had observed or were aware of price-gouging on specific products. It does not mean that they were all consumers; some – like me – could just have been curious.

30% of the sample [i.e. 450] had bought an item at an inflated price – but we don’t know what the degree of inflation was; would 10% be price-gouging? By deduction, 70% of people who were aware of price-gouging were unaffected by it.

It said 540 reports [36% of the 1,500] were about essential hygiene or medical products of which 216 [40%] of those with inflated prices were hand-sanitizer and soap [only 14.4% of the total sample]. Perhaps the price-gouging claims for these products were overstated. In any case, at no point was the use of hand sanitizer recommended as essential as the continual advice was to wash hands frequently using soap and water. I kept a fairly close eye on the availability of products on various supermarket platforms and there was never a point when soap in some form was listed as ‘unavailable’; it might have become ‘unavailable’ on delivery day, of course, but there was usually tablet soap or liquid soap on sale – although not the anti-bacterial varieties. In a health emergency people reach for the best anti-dote, but anti-bacterial soap is no more effective than ordinary soap in satisfactory cleansing.

Of all the reports via the price-gouging reporting tool about hygiene and medical products in high demand, apparently only 1% [which represents just over 25 reports] related to offers through social media [compared to 50% (352) on on-line marketplaces]. I expect that tells us something but I can’t quite work out what. Or is it just easier to use a digital marketplace than to get an advert up on a social media platform?

The article says that “the average percentage price difference for hygiene and personal care products was 414% – meaning people were paying five times the price on average. For medical items, it was 345%. Despite these huge increases, we found that shoppers felt they had little choice but to buy, with 36% telling us they had bought essential hygiene or medical products at the inflated price. 35% chose not to buy at all, but were left without an alternative.” We need to bear in mind that these statistics only relate to the percentage of people aware of price-gouging who were actually affected by it, and that only those actually buying were paying the higher prices. Dealing with percentages of percentages in this article makes simple summarising difficult but my overall impression is that price-gouging was not as bad as it was made out to be and that canny shoppers were able to avoid it. It is not necessarily the fact that everyone who considers buying a product actually needs it and would be seriously disadvantaged without it. As I commented before, ‘essential’ medical products are available on prescription, so ‘desirable’ medical products [like over-the-counter medicines, even when recommended] should not really be classified as ‘essential’. Very few of such products should be used repeatedly without a medical consultation with a doctor or pharmacist so should be a staple item in the medicine cabinet to deal with a short-term condition.

It was also stated that “homemade non-medical face coverings were made mandatory on public transport in England from 15 June . . .”. Whereas there was plenty of advice to the general public not to buy or use specialist medical face masks [such as respirator types] I cannot recall any stipulation that mandatory face coverings had to be home-made. Most people seemed to be wearing the basic disposable masks that are now readily available at supermarkets and were not unduly expensive when I bought twenty towards the end of March.

While this paper was interesting I don’t feel it makes out a clear case of price-gouging in the general market. Despite the plethora of convoluted statistics I found it short on actual analysis. Hand-sanitizer was not a high-volume product line before the epidemic struck [compared with anti-bacterial liquid soap which has all but eliminated ordinary soap products] yet demand rocketed and, not surprisingly, opportunism broke out in the digital marketplace; whether those traders got what they were asking for on their supplies is not known, nor whether they actually had much stock in the first place. I suspect, as the recent Which? paper on panic buying suggested, that the depletion was due to 28 million households buying an extra one or two bottles of sanitizer as soon as the virus started spreading globally: see –
https://www.which.co.uk/news/2020/07/from-panic-buying-to-the-new-normal-how-has-life-changed-since-lockdown-began/

Segun – What’s the problem? Someone will respond if you let us know what is bothering you at the moment. We can help with most consumer problems or give guidance on where to ask if it’s something more personal or specialised.

The post to which my previous comment was addressed has been removed so my comment above should be ignored.

Many contributors to Which? Conversation on this topic mentioned excessive prices on products marketed on sites such as Amazon and e-Bay. At least there it is easy to see and compare a large number of identical or similar products and select the most suitable.

One of my concerns is that a number of the sellers in various formats did not have stock to support their promotions but lured in potential customers for other goods also at inflated prices.

A situation like a virus epidemic creates a panic by itself and then shortages compound it. For future reference, the government needs to set maximum prices and purchase limits for scarce essentials not just rely on the CMA to tick off a few chemist shops months later.

I would like to read the Which? report, but what action has CMA taken about a problem that we have known about for months.

I would like to see how many “reputable” suppliers offered essential at normal, or near normal prices. We can always find people on the net with silly pricing for all sorts of items. 75% of reported inflated prices were from online and market place sellers.

The pandemic did cause shortages, and presumably people hoarded. It is to be expected that prices down the supply chain would increase. I never had any problem buying soap or sanitiser and already had masks in the workshop, but they can be made yourself. WHO said they were not necessary until a couple of weeks ago, of course, for normal use.

I’m not sure how to interpret the numbers coming from the Which?’s survey of 1500 people. https://www.which.co.uk/news/2020/07/36-of-people-forced-to-buy-essential-hygiene-and-medical-products-at-inflated-prices/
30% of people had paid inflated prices. Does that mean 450?
25% were in shops. Does that mean 113?
40% were essential hygiene products. So 45?
So 45 out of 1500 had bought essential products in store at inflated prices? 3%?

I am not suggesting there was not profiteering; I would just like to see more detail about exactly what essential products were unavailable except at extortionate prices from normal supply sources.

One of the retailers criticised pointed out their wholesaler had substantially increased prices; perhaps the investigation should go further down the supply chain?

From the report provided by Chris: “The average percentage price difference for hygiene and personal care products was 414% – meaning people were paying five times the price on average. For medical items, it was 345%.

I expect that most people would would think of shopping around and only paid these high prices if necessary.

It depends how the average was derived. To be useful it would need to take account of a fully representative range of prices paid, from those who paid normal prices (if any) to those who paid excessive ones.

It would be interesting to see the data and play with the figures but I don’t think there is any doubt that price gouging exists.

In early March we were told: “The Competition and Markets Authority (CMA) wants to ensure that traders do not exploit the current situation to take advantage of people.” It is now July and I am not aware of any effective action.

Which? has pointed out that other countries have laws to protect consumers: https://www.which.co.uk/news/2020/06/uk-lagging-behind-on-laws-to-protect-against-price-gouging/

One of the reasons for the empty shelves was the fact that those who were able to buy stock could then sell it on. Not all of it was panic buying for home use. There was no control at this point to stop that, so we saw trolley loads of loo roll and probably similar quantities of soap and hand sanitizer in shopping baskets with no one at the checkouts checking out and no automatic rationing at the self service tills. Thus the stock disappeared and those that had it could gouge to their hearts content.
Secondly, while this was going on, no one had time, energy or inclination to visit these sellers and stop them making a profit from the pandemic. No one on line thought to edit the sites where these sales were taking place and remove the price gougers. Now, of course, as things gradually get back to normal, no one has time and energy to sanction those who have been cashing in at our expense. Which? has published its article telling us how many percent of its survey have been ripped off, but, quite honestly, that’s a fat lot of good, since nothing has changed and it’s likely that the next shortage, when ever it comes will see empty shelves and greedy spivs ranging the market for their own profit and our loss.

I wonder how much of these products bought in bulk have been offered for sale at higher prices online. The supermarkets responded to shortages by limiting the number of items that people can buy, but there is a limit to what they can do.

I agree that the sites hosting the price gougers should be edited but without action to require them to take action, little has changed. When is the government going to take charge of the situation?

Apparently there is a shortage of toilet roll in Leicester again.

The gougers got their stock from somewhere, depriving others. The most likely source was the supermarkets which didn’t begin to ration until it was too late. The on line site controllers could easily have put in a keyword search like “sanitizer” and identified any entry that contained that word. It wouldn’t have taken much to visit the sites involved and to have banished them. No one was prepared to invest the time to do this, they were too busy harvesting our personal data (in the billions of bits and bytes). The government couldn’t be bothered because they were busy worrying about the virus and the economy. Which? collected some data and published it, but has done nothing useful with it.

It’s the responsibility of the CMA to monitor and deal with the problem. Which? has been in contact with the CMA and this subsequently appeared in one of their articles:

‘The government, working with the CMA, needs to step in with emergency legislation to crack down on price-gouging and keep the price of essential items reasonable during a crisis.’

Read more: https://www.which.co.uk/news/2020/04/which-launches-price-gouging-report-tool-to-combat-coronavirus-profiteering/ – Which?

I last visited a supermarket at least ten days before the lockdown and there were restrictions on certain items then, though I do not know if this is typical. I do not know if supermarkets were asked to restrict supplies and had assumed that they did this to avoid criticism by other customers who were disappointed to find shortages.

Maybe, but we seem to rely on government and regulators to step in with legislation as soon as this problem arose. But it takes time for everyone to assess if profiteering is widespread and start deciding when to take action. Much better for reputable suppliers, who set the prices, to ensure that they do so fairly. What is hard for anyone to do is anticipate a rush on things like toilet rolls and other non-medical type supplies and organise replacements.

I’d like to know just what proportion of the whole population was “forced” to pay very substantially more for essential products related to the epidemic. That is not at all clear from the limited Which? report, where most of the reports (75%) are down to the usual suspects – market place traders, not noted for fair trading. One inference from the figures Which? reported was that 3% might have been affected thus by high street retailers. But that may be misinterpreting their data.

Other countries already had legislation in place to tackle price gouging. I agree that our supermarkets have not been guilty price gouging and from what I have seen online, there is little evidence of profiteering. But, as widely reported, supermarkets have been out of stock of some or all of the key items that have been discussed and even if they were available, many of us are staying away from shops and relying on the internet. We have read examples of people who have needed face masks to be able to do their work.

Even if the percentage of people who have ordered from the price gougers is small I don’t see that as a reason to ignore the problem. Which? has collected information and passed it on to the CMA. I’m not sure what more it can do to help.

I have been fortunate to have bought a good stock of toilet rolls when they were cheap last year and am still using this stock. Like you, I have DIY masks but have not needed to use them. I have been given hand sanitiser but have relied on wearing gloves and/or washing my hands.

I was not suggesting we ignore the problem, just putting it into perspective.

Are those who cleared the supermarket shelves and hoarded to ensure they were OK selfish or dealing with self preservation? Until the shops realise the scale of this sort of behaviour is going to cause difficulties in sourcing new stocks I don’t know at what point you put a stop to it.

It seems a bit late to involve the CMA, and how are they going to penalise the 75% of the culprits who are online and in market places hosted by, for example, Amazon?

I believe that Which? reported to CMA in late March or early April. We are very much agreed that action is urgently needed to tackle the problem of online marketplaces selling dangerous products. I don’t like the idea of doing nothing just because it is difficult.

Here is a joint report about price gouging issued yesterday by the CMA. It does not even mention online sellers, even though the CMA is responsible for online practices as well as those of shops: https://www.gov.uk/government/publications/cma-and-trade-bodies-joint-statement-against-price-gouging/joint-statement-against-price-gouging

The problem partially emanated from the initial slow response from supermarket chains and suppliers of pharmaceuticals and other precautionary medical suppliers.

Given that we knew all along this virus was coming, it incentivised people to panic buy, a normal and expected response to a potentially fatal disease that posed an imminent and impending threat to each and everyone’s very existence.

My question is, why didn’t the supermarkets take the necessary steps to ration supplies such as toilet rolls, hand sanitizers and soaps at the very start of the outbreak? It’s all very well to be wise after an event I know, but the fundamental supply and demand principle is an elementary key principle in all marketing distributions and outlets. The eventual outcome is plain for everyone to see.

During WW2 we were issued with ration books that ensured a fair and equal distribution of food and other essential supplies, but shortages even then were illegally subsided by what was then called ‘The Black Market’. Anyone caught partaking in this illegal practice was subjected to a hefty fine and sometimes incarceration or penalised with 2 years hard labour.

Unfortunately, governmental requests to discourage panic buying fell on deaf ears, shortages followed and the inevitable opportunistic profiteers moved in to prey on the needy and vulnerable, all of which could have been avoided if the supermarkets had acted a little sooner.

.

Is it the duty of supermarkets to ration supplies? As I said before, I suspect they did this to avoid disappointment of other customers, which could have resulted in criticism. Rationing items by number per customer disadvantages those with large families.

WW2 was before my time but I understand that coupons were issued per person and the responsibility of the shop was to allow goods to be bought providing that appropriate coupons were provided.

Yes the supermarkets could have acted sooner, before the shelves had been emptied of toilet rolls, but I’m not sure what they could reasonably have achieved without government intervention.

Do the supermarkets need government intervention before acting in the interests of their customers? They certainly did eventually, whether that was due to government advice, which we now know was not entirely reliable, is not certain, but act they did. Examples include, long life milk, fresh milk, milk powder, toilet rolls, tissues, hand sanitizers, antiseptic wipes, and multiple pack tinned food, including soups, bake beans etc.

With global media and news channels readily available to most businesses and supermarkets, plus frequent WHO updates, global air travel, etc. we knew the virus was heading our way. British people rescued from Wuhan on special flights and transferred to secure accommodation for 14 days, all of which added to the uncertainty and fear causing an unprecedented surge of panic buying.

When a government deliberately plays down the significance of an incipient emergency it is difficult to criticise supermarkets for carrying on as normal.

There was no coordination, it took some time for the government to relax the competition requirements thus allowing the major stores to act cooperatively, and it seems to be shrouded in secrecy whether or not DEFRA called in the heads of the big retailers and distributors in an attempt to make some sort of organisation out of the chaos. So they all acted independently of each other in ignorance of the overall supply chain position and of other relevant decisions affecting the sector.

It did take the major retailers too long to see that the raids on the necessities were not being carried out by their own regular customers but perhaps they were looking elsewhere at the time and were scrambling to quadruple their delivery operations from a virtually standing start and a lack of information on priority needs.

Those which had a delivery operation have paid a heavy price in terms of public dissatisfaction compared with their upstart competitors in the discount bracket who didn’t seem to go out of their way at all to meet the needs of the emergency; that piled even more pressure on the majors. Because we were able to continue having deliveries we were buying things from Sainsbury’s for friends who had deserted them when Aldi opened in the district.

Looking backwards it is easy to see where things could have been done differently and my conclusion is that it is largely due to having, as a matter of policy, a ‘small’ government in terms of capacity to get things done in a hurry.

I was convinced that the PPE fiasco was due to short-term decisions taken somewhere in Whitehall to empty the strategic stores in order to flog off the warehouses and save the operating costs. The NHS had been condemned for some time to being run on a shoestring so had very little in hand when the crunch came. The residential care sector had been marginalised, starved of income, talked about but never acted upon, and subjected to idiotic policy proposals for the purposes of winning elections but with no intention of being implemented. To add insult to injury they were obliged to take in hospital patients from the onset of the epidemic.

Come on chaps, a second wave is bearing down on us, so let’s open the pubs and restaurants again and let people invade our small seaside towns“. I was going to say you couldn’t make it up, but I just did. I am sure that is not how it actually happens.

I could go on but it is too painful.

Beryl – I had not realised there was a run on fresh milk as it is not easily stockpiled, but there certainly were restrictions on quantities per purchase so people drove to another store to get more. There was actually a glut of milk and much had to be wasted since the restaurant and hospitality industries were closed. The cows were still producing and the dairies were still functioning so the milk supply situation was just mishandled. I suspect there was no one person or unit within any government department looking after the supply of milk and ensuring that it was distributed satisfactorily to meet the changing balance of demand. The supermarkets introduced restrictions on their own initiative as a result of competition from their rivals and, as Wavechange mentioned, in order to look after and hold on to their own customers. They did not want to go down in history as ‘milk snatchers’ because history tells us that reputations like that take a very long time to go away and will be brought up again on the slightest pretext.

It is not ministers who do the ground work in these situations, is it, but their departments – the civil servants. While I can blame government for bad political decisions surely the people working for them should be using their brains to evaluate situations and come up with considered proposals.

The trouble is this is all in hindsight. And there is the problem of competition among advisers, such as those modelling the outbreak. One group telling us cases would double every 5 days, another every 3. a worst case scenario put forward was everyone in the UK would catch COVIS-19. These would have very different implications.

You can freeze fresh milk.

John – I share your view that the government has not handled the consequences of the pandemic well, though we have the benefit of hindsight. The toilet roll shortage in Australia was well publicised and should have provided an insight into what might happen in the UK. I have little practical experience of how supermarkets have operated during lockdown but in early March I could see good evidence of the developing shortages. I have been very impressed how SOME of the supermarkets have responded to the much increased demand for deliveries and click & collect where I live. This seems to be regional and I might praise others if I lived elsewhere. Supermarkets are, of course, dependent on manufacturers and distributors, and it has been a difficult time for them to carry on working while maintaining a safe environment for their staff. The outbreaks in the chicken processing factories demonstrates what can go wrong. It was interesting to learn that the great flour shortage of 2020 was because of a lack of capacity to supply the small bags needed by consumers rather than a lack of flour.

From what I have been told, and I have five family members working in the NHS, the PPE shortage was regional, and none of them had any problem. At least some PPE has an expiry date so if it had been stockpiled well before it was needed that would have been a waste of money. I know nothing about the situation in care homes, but don’t doubt what you say.

While milk can be frozen, freezer capacity is required and most home freezers were probably already full. Compared with loo rolls, fresh milk is not easily stockpiled as I said. It does not appeal either to the price gougers who would need to sell it on; it is heavy and not easily protected in transit from deterioration or leakage.

Properly-run strategic reserves employ techniques to turn over the stock to avoid wastage on date-marked supplies.

Not a serious contribution to this discussion, but having spent a lot of time in NHS establishments recently I have noticed that the average wearing duration of latex gloves and polythene aprons is about five minutes so turnover is high. I do not know how critical the use-by dates are or the extent to which they can be exceeded in low-risk situations.

Yes you can Malcolm. When I eventually received an Ocado delivery, I was limited to 2 litre bottles of fresh milk and 2 litre bottles of LL milk which was topped up by a very kind neighbour during their weekly visit to Sainsbury’s.

I do recall BJ, before he was inflicted with the virus, stating the government had contacted all the major supermarkets requesting they prioritise all vulnerable customers who had received the government notification letter. He also emphasised there was no shortage in the supermarket supply chain, but that too fell on deaf ears, people were still up at the.crack of dawn, trolleys loaded abound, stripping the shelves bare while supermarket officials stood by helplessly watching and exited media photographers cameras clicking to the sound of customers fighting over numerous packs of loo rolls until their trolleys could take no more!

I feel they could have done more at this crucial initial stage to limit vital supplies at the checkout instead of waiting until it was too late to avoid the unexpected surge of panicking people. They knew it was coming and were effectively caught well and truly napping, after which followed a whole gamut of confusion, desperation and exploitation from that point onwards.

I accept that, John, but I believe that I am right about PPE shortages having been far worse in some areas than others.

I very much doubt that there has been any price gouging on fresh milk. I agree with Beryl that the supermarkets could have done more, but maybe not without the direction and support of the government. This could require employing extra security staff to deal with disgruntled customers who don’t like being told what to do.

I still don’t know why loo rolls became such a must have item.

Nor me. Follow the bears.

I presume you wrap yourself in them to protect yourself from any contact with the virus and to act as a facemask.

Don’t give people ideas!! 🙁 . The inner tubes make good containers in which to sow sweet pea seeds; they like a deep root trainer. And this looroll pandemic coincided with the sowing season…………

Wavechange, you have mentioned before about PPE and it seems from other reports that many NHS establishments did not experience shortages. But we seem only to be told the bad news, the negatives. Not the good stuff. I wonder how many establishments that use PPE shared it around, or whether they also protected themselves?

Listening to the news this morning the interviewer constantly interrupted and used the “but”, “you didn’t” and other negatives, pushing their particular agenda. The same seems to happen between the 4 nations where there seems to be a point scoring game between at least two of the “leaders” rather than responsible cooperation.

While respecting their devolved status, I do wish the UK government [acting for England] and the three other governments had put up a united front; the English policy was not always the best one in my opinion so they should have collaborated on the safest route in the interests of the whole Kingdom.

I’m not sure about that. I think there is merit in trying different approaches and finding out what works best, not only in minimising transmission of the virus but in achieving public compliance.

I’m not sure what this has to do with price gouging. 🙁

Well, achieving public compliance has spectacularly failed in England and I just hope it doesn’t lead to a second wave of the virus. Dicing with people’s safety in order to score points against the other nations is not good government, as Malcolm has observed.

Perhaps this issue doesn’t have much to do with ‘price-gouging’ itself but both are indicative of the lack of concerted action and preparation across the UK. The UK government has been criticised for not having legislation ready on the statute book to control profiteering during a national emergency. Having four different sets of policies for safe social conduct during an emergency in a small nation makes it difficult to apply and enforce, so people exploit the weak points . . . as in price-gouging.

Sorry but I don’t agree. A scientific approach would be to try different solutions and see what works best. As I mentioned, public compliance is a complicating factor.

The reason that other countries have legislation against price gouging may be because they have had to deal with emergency situations that the UK has not, but I hope we will rectify this soon. It was encouraging to read what action eBay and Amazon claim to have taken but the joint statement by the CMA and trade bodies about price gouging does not inspire me with much confidence.

John Ward says: Today 00:36

While respecting their devolved status, I do wish the UK government [acting for England] and the three other governments had put up a united front; …they should have collaborated on the safest route in the interests of the whole Kingdom.

Wonder why government doesn’t co-operate?

I don’t disagree with that but a better way of progressing experimentally could be to do it by the calendar instead of geographically. It might have been more effective to start with the scientifically safest arrangements across the whole of the UK and progressively relax the restrictions one step at a time in unison so that any necessary roll-back would have been uniform and less complicated to understand. It would also have stopped the unseemly bickering by the politicians in the four nations.

In the article on price gouging published by Which? on 3 July it reports that Sue Davies, Head of Consumer Protection at Which?, said ” . . . the CMA must, where appropriate, use the existing powers it has to crack down on any individual or business found to be exploiting others during this time of crisis“. Easy to say and virtuous to propose, but what are these powers? How is the exploitation defined in an enforceable form? The CMA can investigate the working of markets but it seems ill-equipped to deal with the back-room antics of fleet-footed gougers who snapped up stocks of face masks and sanitisers and offered them for sale at extortionate prices on unregulated marketplaces. And when they’d done they’d gone, never to be found again.

If “hundreds of thousands” of offers for essential products at exorbitant prices have had to be stopped by Amazon it tells me there is something deeply wrong with a site that attracts that sort of trade and perhaps that would be more worthy of investigation by the CMA. There are elements of dishonest trading, false markets, and flagrant disobedience of consumer rights legislation, all of which should be exposed, condemned and penalised by the Regulator.

I think Which? should wage war on digital marketplaces to clean them up, purge the criminals, and restore public confidence in on-line shopping which has many advantages if properly controlled and operated responsibly.

I agree about digital marketplaces, but especially those from which the big organisations profit – Amazon for example. As with the marketing of fake and dangerous products it is time we got a grip on this irresponsible money-making behaviour. Should Which? be “affiliated” with this sort of organisation? I am not sure what that says about protecting the consumer.

I would like to think there are many speculators with rooms full of unsold toilet rolls, hand cleaner, masks, tins of beans and other stuff.

We do indeed need Which? to help tackle these problems. It cannot do that on its own but I do hope that its efforts will help. We do not know if Which? has informed the CMA that as well as the online marketplaces providing good examples of price gouging, there are good examples of dangerous products being marketed on these platforms. Apart from removing ads for overpriced goods and dangerous goods what more are the owners of the marketplaces doing to prevent these practices continuing?

Absolutely agree John. If these sites can not regulate themselves they need a little coercion to help them on the way. The on line market place relies on trust, honesty and reliability to succeed. If this becomes questionable sales will drop off as more have bad experiences with their shopping. What has made on line shopping popular is range of goods, ease of access and a good delivery service, often, but not always, with a lower price. That side of the market is currently more attractive than the negative ones. I wonder how long that will remain the case?

Back on topic:

“Watchdog – price gouging
Watchdog on The One Show has been investigating examples of price gouging – when prices for essential items are artificially and unfairly inflated. Some examples were found on eBay and Amazon. This is what the two companies told us.

eBay
A spokesperson for eBay said: “We’ve had measures in place for weeks to tackle price gouging, including restricting the listing of key items, increasing the size of our monitoring and enforcement team, and creating a new price gouging policy and reporting option. So far, we’ve blocked or removed 15 million attempts to list items at inflated prices, and we’ve suspended thousands of accounts. We’re also working with the Competition and Markets Authority, Department of Business, Energy and Industrial Strategy, and Trading Standards to tackle the issue.”

Amazon
Amazon says it wants customers to contact them if they find examples of price gouging on the site.

A spokesperson for Amazon said: “There is no place for price gouging on Amazon. When a bad actor attempts to artificially raise prices on basic need products during a global health crisis, it’s bad for customers and the hundreds of thousands of honest businesses selling in our store. In line with our long-standing policy, we have recently blocked or removed hundreds of thousands of offers and pursued legal action against bad actors.”

Which? reporting tool
The consumer organisation Which? has launched a tool to report price gouging, which it says will be used to help tackle the problem. It can be found at https://www.which.co.uk/pricegouging

If eBay has blocked or removed 15 million attempts to list affected items, that is a very worthy attempt, though some of them may be multiple attempts by the same seller. I presume that people listing items purchased in supermarkets has contributed to shortages.

@Wavechange:

A spokesperson for eBay said: “We’ve had measures in place for weeks to tackle price gouging, including restricting the listing of key items, increasing the size of our monitoring and enforcement team, and creating a new price gouging policy and reporting option. So far, we’ve blocked or removed 15 million attempts to list items at inflated prices, and we’ve suspended thousands of accounts. We’re also working with the Competition and Markets Authority, Department of Business, Energy and Industrial Strategy, and Trading Standards to tackle the issue.”

Yes. So the measures in place, as I’ve discovered and had confirmed by the eBay sales team, include preventing any new listings of key items that are in short supply, and thus potentially subject to price gouging, but regardless of the price at which they are offered!

By doing this, eBay are preventing price competition with the existing “authorised” (there is no such thing) sellers of these items, maintaining their inflated prices and eBay’s selling commissions. D’oh! If you reduce supply and prevent price competition, you are actually supporting the very people resposible for price gouging on eBay.

If a Which? Researcher would like to get in touch, I can provide further details of this dirty practice.

This is, to my mind, an interesting and well produced analysis by Which? https://www.which.co.uk/news/2020/07/from-panic-buying-to-the-new-normal-how-has-life-changed-since-lockdown-began/

One interesting snippet:
“Anecdotally, several Which? members told us they thought grocery prices were being hiked during lockdown. ‘Supermarkets have put the price up on products’ was one fairly typical comment. However, when we compared prices across eight major supermarkets, we found the cost of a trolley of 40 items actually went down slightly from £59.16 in March to £58.27 in April.

There have been some price increases in supermarkets, for example the removal of long-running BOGOF offers resulting in a doubling in price, but in general prices seem to have been maintained, which is good considering the difficulties in obtaining supplies, precautions to maintain social distancing and the extra investment in meeting the greatly increased demand for deliveries.

Nevertheless, items such as hand sanitiser were simply not available in supermarkets for an extended period, forcing people to buy online and at excessive prices. In addition, those who avoided shops to protect themselves have turned to buying online.

I support the efforts of Which? in reporting the problem of price gouging and passing the information on to the CMA in the hope that action will be taken to tackle the problem.

Thanks for referring us to this, Malcolm. I also found it interesting and well-produced.

One statistic that I found remarkable was on the graph under the section “Panic buying peaks ahead of lockdown” which showed how people felt on a range of lifestyle and well-being factors. Concern over the negative effects of coronavirus on personal finances started at what I thought was a low 58% in mid-March but fell roughly every fortnight through 54%, 53%, 51% and then dropped in the final fortnight to 8 June to a surprisingly low 43%. It is possible that this reflects the socio-economic characteristics of the sample, and, of course, most of the worst news about jobs and commercial decline has only come out in the last two weeks, but that still showed an amazing sense of confidence over people’s personal financial prospects.

There was another telling comment: “While widespread stockpiling was not as common as was perceived, the cumulative effect of large swathes of people picking up one or two extra items did have a big impact on supplies. In addition, Which? found that the uptick in demand wasn’t the only reason for empty shelves. The coronavirus pandemic also exposed the fragility of the UK’s food and drink supply chains“. [My emphasis]. Is that not also a warning to government that there does need to be some degree of intervention in the supply of vital food, drink and provisions to ensure equitable availability and to build resilience against future emergencies?

It appears that there is currently no appetite within the government to undertake any comprehensive review of these policy issues and I am increasingly led to wonder if there ever will be.

I find these occasional papers from Which? very useful and wish they could be published in Which? Conversation routinely as discussion topics.

It does not take much to create shortages of products. The last time I was in a supermarket, in mid-March, I bought a six-pack of UHT milk rather than two because no single cartons were available. It would not take many people to do this to create a shortage. Had I not already got a large number of toilet rolls, bought when they were cheap, I might have bought a large pack, since the shortage was already apparent.

I do hope that the government will act to protect us from future shortages, which can lead to price gouging, as we have seen. When coronavirus is over, perhaps modest stockpiling of goods that will not go to waste could help provide a buffer against future shortages. I do this to some extent because manufacturers and retailers play silly games with prices. I try to buy coffee beans when they are on offer and often have five or six packs in stock. Instant coffee I buy when it’s £3 a jar rather than £4.50.

I am also concerned about the security of our electricity supply. Our existing generating capacity is stretched. If there was a concerted effort to turn on our kettles and heating appliances at an agreed time, even for a short period, there could be widespread power outages because the grid would not cope. Hopefully the people involved would just take out their supply fuse but these can carry a substantial overload for a short period.

Hopefully we will get back to national stability which we have more or less enjoyed throughout my life.

I really don’t know how the government can protect us from future shortages (what products should be protected?). Unless they were to rapidly introduce rationing. The supermarkets are the losers if they cannot supply what people want so have the incentive to arrange supplies. I think one of the major problems was the relative speed of lockdown, the consequent inability or unwillingness of people to physically shop, and the lack of a home delivery capacity to cope with a huge increase in demand. However I think most people got to grips with the situation without starving?

This situation is most unlikely to recur ( when did this happen in the past?) but maybe it will have prompted retailers to be more educated in how to deal with such a problem.

Any time a product is on special offer, supermarkets are going to expect a surge in purchases.

That is when I normally stock up on anything we use regularly that has a long use-by date. I roughly know when the product will be on offer again and how much we will use in that time, so shop accordingly. I have just stocked up on coffee at half price. If it runs out before the next special offer, I might try something else that is on offer.

But my extra shopping is nothing like the scale some of the stockpilers we have seen on the TV.

A couple of months ago, there was an interesting news item of the workers responsible for keeping us supplied with electricity. They had erected accommodation so they could live on site.

We do the same, Alfa. The retailers will know that products that are on offer will attract bulk-buyers who can afford to buy them and have space to store them. I share Beryl’s concerns but wonder how our supermarkets could have coped with shoppers buying more than they need. There might be ugly scenes. With online purchases it’s much easier to regulate supply, but most people are still shopping in the supermarkets.

I have not seen any evidence of price gouging in supermarkets but it has been easy to see online. Presumably opportunists who have depleted supermarket stocks have gone on to offer their purchases at inflated prices on eBay. For popular items, how difficult would it be to check listings and remove products that are five times the normal price. In another Convo you made the point about a cheap product being offered with a ridiculous carriage price, but that would not be difficult to spot. Part of the advertising costs for using online marketplaces could go towards policing the market.

Malcolm – In his introduction, Chris has mentioned measures against price gouging in other countries and I provided a link to a Which? article that mentioned legislation. We could at least try.

Ocado still has a limit of 2 or 3 on many products – flour, yeast, plant-based milks. We now have weekly deliveries, but when milks were a problem on bi-weekly I was ordering different milks to see us through. Luckily Oatly have quite a range of oat milks and I also like coconut milk.

Ebay have not done anything about the seller with ridiculous shipping. Just one of their probable tax avoidance products:
https://www.ebay.co.uk/itm/TemaHome-Gleam-Large-Rectangle-Marble-Coffee-Table/254584852973?hash=item3b467091ed:g:IlYAAOSw1kxeIlFs

You could save £200 by collecting that table. Their packaging cost is a bit expensive. I hope that it’s in condition and without gouges.

It looks like the item is in a shop, so quite likely to have a few gouges on it.

Wonder what would happen if you bought the table, then asked for the shipping to be refunded as you were collecting it in person?

I’m more concerned about price gouging where food and other essential are concerned. Maybe the price gougers have learned their ten-times tables.

I find the idea of many people adding an extra item to their supermarket trolleys interesting but questionable. Obviously enough people stocked enough to offer it at inflated prices. Indeed, we saw pictures of loaded trolleys piled high with loo roll back in March. Since the supply of food and general household goods is usually stable, people were obviously buying a lot more than suppliers were trying to supply on a regular basis. It would be interesting to see how much “hand to mouth” supply is happening in ordinary times and how much reserve there is in the supply chain.
Logically, now, there ought to be a reduction in shopping while excess purchases are used up.
There does seem to have been a clear anticipation of the problems ahead for the public to react before the government did. Their uncertainty at what was to come produced a predictable reaction. Price gougers were one step ahead of the rest.

I understand there were also supply difficulties, Vynor. For example, as many switched to baking bread, we saw a shortage of flour and yeast. I’m still only coping because I have cut down on baking bread and putting flour on my supermarket orders in the hope that it is available. The flour shortage seems to be more to do with the limited availability of small bags, since the closure of commercial catering reduced the demand for flour.

As well as those who live hand to mouth, those living in studio flats etc. don’t have much opportunity to store food and other purchases.

That is an interesting question Vynor.

I am shopping online for 2 households who shop quite differently. I normally stock up on products when they are on special offer, while my parents normally just buy what they are going to use in the next few days.

Our bills have much higher offer savings than my parents even though I try to make the most of special offers for them. Last week I suggested they had a small gammon joint to cook instead of the sliced cooked ham they wanted – much better value.

A lot of the tinned foods they require – fruit, corned beef, fish, soups are still frequently out-of-stock so I have been trying to get them to keep a few in reserve just in case the virus kicks off again – very difficult to change their habits but they will probably find an extra 6-pack of tomato soup on offer delivered next week.

They are eating better than normal – sausages that contain nearly double the amount of meat their usual ones contain for example. ( You have been given a few substitutes . . . .) Luckily only registered users can get online and they never see a bill as I don’t want them to cut back. Ocado is rather dearer than their usual Morrisons.

The recent Coronavirus Act 2020 was introduced to cope with a variety of contemporary problems. Section 25 on food supply does not seem to mention pricing: http://www.legislation.gov.uk/ukpga/2020/7/contents/enacted

Surely the small local retailers, especially one off independents need to maintain good relations with their local customers for their own survival as a business so surely it’s in their own interests not to try and rip off their customers for their own selfish greed. And did you know that there’s a shop on the platform in the big train station in preston in lancashire who are selling sparkling spring water at more than 50 TIMES the price it sells for in the german supermarkets like aldi and lidl. Last time I was at preston station it was on sale at over £2.00 for just 500ml! And that was well before the lockdown. How about that?! These outrageous rip-offs are nothing new, it’s been going on at places like train stations and motorway services for absolutely decades and that needs dealing with too.

Sadly, some people will happily (or not so happily) pay the price for convenience. I would be tempted to ask politely if they would be kind enough to fill-up my bottle with tap water.

In the good old days there would have been a water crane where you could have filled your bottle. I wonder if the charged firemen the same rate to fill their tenders?

Why some are prepared to pay (far) more for water than they pay for petrol and diesel beats me.