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Australian Competition watchdog concerned about pricing of rapid antigen tests

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

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Topics: AUSTRALIA   

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 which includes more than 1,800 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.

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.

“Our inquiries so far confirm that a large volume 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,” Mr Sims said.

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.

Most reports received by the ACCC are about businesses selling tests in New South Wales. More than 90 per cent 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.

The most reported traders are pharmacies (879 complaints, 47 per cent of reports), followed by convenience stores, tobacconists and supermarkets (283 complaints, 15 per cent), and petrol stations (272 complaints, 15 per cent).

The prices reported to the ACCC by consumers are increasing. Initially, the average price reported to the ACCC was around $20 per test and the highest reported prices were $68 to $79 per test.

From 7 January 2022, the average and the highest prices reported to the ACCC have increased to around $24 and $80 to $100 respectively. The highest price reported for a single test is $100. Some of the higher prices relate to reports of selling through online marketplaces.

“In the middle of a significant outbreak of COVID-19 in a pandemic, the excessive pricing of rapid antigen tests required to diagnose the illness and protect other members of the public, is of significant concern to the ACCC,” Mr Sims said. “Only a few weeks ago tests were readily available at most chemists and supermarkets for around $10 for a single test.”

“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,” Mr Sims said.

While $20 is lower than the more extreme reports received by the ACCC, such retail prices reflect mark-ups from mainstream wholesale prices beyond what would usually occur in this segment.

The ACCC is continuing to examine claims by retailers about the reasons for the current prices, and whether those claims can be substantiated or are misleading. In certain circumstances, excessive pricing of essential goods or services may also be unconscionable conduct, a potential breach of the Australian Consumer Law.

Some retailers are reportedly refusing to provide receipts or providing incorrect receipts to consumers. The reports we’ve received about this issue relate mostly to convenience stores, tobacconists, and supermarkets (31 per cent of reports), pharmacies (27 per cent), and petrol stations (23 per cent).

Reports include a convenience store recording the sale of tests as a ‘sandwich’, while other retailers reportedly require customers to pay in cash and refuse to issue a receipt.

Consumers have reported packs being split and sold in individual lots, sometimes without instructions for their use, and tests approved for clinical or professional use being sold directly to consumers.

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 per cent.


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