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RATS! $250 for a RAT: ACCC slams “outrageous” price gouging as test shortages prevent employees from returning to work

“We have received reports or seen media coverage of tests costing up to $500 for two tests through online marketplaces…which is clearly outrageous,” said Rod Sims, chairman of the ACCC, which has joined with Australian Federal Police to investigate excessive pricing on rapid antigen tests (RAT). One online ad offered a single test for over $1,000. Meanwhile, the Chamber of Commerce says the ongoing shortage of rapid tests is preventing employees from returning to work.

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                "Clearly outrageous":
               Rod Sims, chair ACCC

“The 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,” said ACCC chair Rod Sims.

“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.”

Before the tests became virtually compulsory, Coles were selling five tests for $50 in its supermarkets.

The ACCC has received over 1,800 reports from consumers about rapid antigen tests since 25 December 2021, and is now averaging close to 150 reports a day.

“There are several businesses that have repeatedly come to our notice thanks to the information provided by the public,” Sim said. “We are asking those businesses to urgently explain the prices they are charging.

“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. 

“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 highest prices by far have been identified on online marketplaces, one of which featured an advertisement of a test for over $1,000 each.”

 Prices over time RAT graph 2.png

The ACCC is working with the Australian Federal Police (AFP) on matters that may be a breach of the determination under the Biosecurity Act recently introduced by the Government, 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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Beware the test rats! Report them for gouging

Sims warned the RAT shortages will continue for some time. “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.”

Until those shortages are resolved, many employees will be unable to return to work - despite the recent relaxation of close contact rules - according to the Australian Chamber of Commerce & Industry (ACCI).

“The expansion of close contact rules is welcome and will provide some relief to industries facing critical staffing and supply shortages, ensuring that we keep as many Australians as possible in work,” said ACCI chief executive Andrew McKellar. 

“Until supply constraints on rapid antigen tests are resolved, many employees caught up in isolation requirements will still be unable to return to work.

“We have been calling for rapid antigen tests to be freely and widely available for Australians, small business and other industry settings since September last year. The Government must re-double its efforts to procure the supply Australia needs.”

To report a Rapid Antigen Test rat anonymously, go to: https://accc-cartels.whispli.com/cartels