Rapid antigen tests – more widely known as RATs – are available in scarce supply across Australia as demand for the kits continues to surge across the country.
And now, the Australian Federal Police have taken notice.
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The AFP’s Taskforce LOTUS, which was established last year in response to potential criminal threats to the COVID-19 vaccine rollout, will lead the investigations into price gouging of RATs in Australia.
Individuals and businesses are being warned they could face five years in prison or a $66,000 fine if they are caught re-selling COVID-19 tests for more than 20 per cent of the original retail purchase price.
If an individual or business buys RATs from a retailer, like a chemist, and then sells those RATs for more than 20 per cent of what they were purchased for, they will face criminal charges under the law.
It does not apply to retailers who buy from a wholesaler.
The individuals or businesses could also be forced to surrender the RATs, which will be sent to the National Medical Stockpile.
“The AFP will use its full powers to crack down on RAT price gouging,” AFP Assistant Commissioner Crime Command Nigel Ryan said.
“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.”
“My message is clear. Do not risk jail time or a significant fine for a few extra dollars.”
The AFP crackdown comes amid a nationwide shortage of the kits, where some retailers have been caught charging exorbitant prices.
Australian National University emeritus criminology professor Roderic Broadhurst told AAP a squeeze on supply creates opportunities for criminal entrepreneurs, who are already well equipped to distribute.
“They’ve already got a contraband logistical arrangement, they may not even have to go to a great deal of elaboration” to offload products on the black market, Professor Broadhurst says.
Earlier in the pandemic, dark web marketplaces were trafficking in protective equipment and dubious vaccines, later moving into things like vaccine certificates, though Prof Broadhurst notes entrepreneurial criminals aren’t just cashing in on COVID-19.
“It’s anywhere we’ve got supply (issues),” he says.
‘The golden rule is crime follows opportunity, when there’s a gap in the market to exploit, it will be (exploited) by somebody’ – ANU emeritus criminology professor Roderic Broadhurst
ACCC boss Rod Sims says retail price-gouging on COVID-19 rapid antigen tests is “beyond outrageous”.
The consumer watchdog said at the “extreme end” it had received reports of RATs costing up to $500 for two tests through online marketplaces, and more than $70 per test through convenience stores, service stations and independent supermarkets.
Despite wholesale RAT costs being up to $11.45 a test, the agency said prices for the kits are often retailing between $20-$30 and are priced much higher through smaller outlets.
“It’s just beyond outrageous … it’s extremely concerning,” Mr Sims told reporters in Sydney on Monday.
“We realise demand and supply-chain issues have impacted since then, but our initial research suggests that a price of around $20 per test or more, however packaged, may be hard to justify based on the average wholesale costs and such retailers should explain why the price is so high,” he said in a separate statement.
‘Any test costing more than $30, even with supply constraints, is almost certainly too expensive and would seem to be taking advantage of the current circumstances’ – ACCC Chair Rod Sims
He labelled retail mark-ups of more than 100 per cent on RATs as “beyond the pale” and said the agency was working with the Therapeutics Goods Administration and the AFP to stamp out unscrupulous selling of RATs.
“We’re very much looking forward to what (retailers’) explanations are for the very high pricing that’s been reported,” he said.
“Often some of these high prices are at stores you wouldn’t expect like petrol retailers, tobacconists and convenience stores. We’re very much looking at those as well as pharmacies.”
In addition to exorbitant prices, some retailers were failing to provide receipts, while other traders were breaking up wholesale bundles of RATs designed for medical centres and selling them retail.
Mr Sims said the ACCC planned “very soon” to take action – which could include fines and legal proceedings – against profiteering retailers.
“There’s a lot going on and we hope companies hear this message and adjust their behaviour,” he said.
The watchdog said the “concerning practices” had come to light from analysis of more than 1800 reports from the public since Christmas.
Close to 150 reports are coming in each day from concerned members of the public about sky-high RAT pricing, it said.
Chemists are the worst offenders, followed by convenience stores, tobacconists, supermarkets and petrol stations, with the ACCC pointing in particular to some King of the Pack and Metro Petroleum stores.
The ACCC has so far contacted more than 40 test suppliers, major retailers and pharmacy chains across the country reminding them they need to back up claims to consumers about reasons for higher prices.
“We will continue our investigations and analysis of information from consumers, retailers and suppliers, and will provide further updates in coming weeks,” Mr Sims said.
Pharmacists are under strain as people chase scarce tests, with Pharmaceutical Society of Australia (PSA) members reporting they receive an average of four calls per minute about rapid antigen tests.
In many cases pharmacists were also being required to pay for tests upfront and then claim the money back from the government for the free tests available to concession cardholders, creating cashflow issues for smaller businesses trying to source supply, PSA director Fei Sim told AAP.
“Pharmacists don’t actually have any stock, or if they have any, the stock level is very low.
“The onus is now on pharmacists ourselves to go and source our own RATs,” Dr Sim says.
The federal Department of Health said on Thursday that supply should stabilise in coming weeks and denied “categorically untrue” claims the government had been requisitioning tests from private importers and suppliers.
“Supplies of RAT kits are not being redirected to the commonwealth and at no time has the department sought to place itself ahead of other commercial and retail entities … Any such claims are false, and where notified to the department will be referred to the ACCC,” the department said in a statement.
– With AAP