Thursday 28 May, 2020

NOW IN EFFECT: Up to $2m in fines, imprisonment for price gouging

As of Tuesday, March 31, retailers found to be charging customers excessive prices for goods during the novel coronavirus (COVID-19) crisis can be fined up to $2 million or sentenced to two years’ imprisonment.

This is provided in the Trade (Sale of Goods During Period of Declaration of Disaster Area) Order 2020, which was approved in the Senate on March 27. The Order was also approved in the House of Representatives on March 25.

The measure is being undertaken to stamp out recent cases of price gouging stemming from the COVID-19 crisis.

Under the Order, no person whose business includes the retail sale of goods shall sell any necessary goods to another person at a price higher than the price charged immediately before the coming into force of the Disaster Risk Management (Declaration of Disaster Area) Order, 2020, on March 18.

This is unless that person proves that the difference in the price in question is attributable solely to the cost to the business concerned for obtaining the particular goods.

Covered are any items used or intended for use as food or drink; personal care items such as soap, cleaning products, antibacterial products, toiletries, alcohol, hand sanitizer, bleach, and gloves; and medical supplies, including surgical masks and prescription and non-prescription medication.

Minister of Foreign Affairs and Foreign Trade, Senator Kamina Johnson Smith, who introduced the Order in the Senate, said it is aimed at protecting consumers.

“Unfortunately, it has been that various business enterprises have sought to exploit the current situation by increasing prices of goods without apparent justification, and this is being called price gouging. The Government now, therefore, seeks to protect consumers by promulgating the Trade (Sale of Goods During Period of Declaration of Disaster Area) Order 2020,” she said

Ms Johnson Smith pointed out that agricultural goods are not included in the Order at this time.

“The relevant Ministry has determined that it will keep the matter under review such that if it does become necessary, then they will issue a similar order, but under the Agriculture Product Act,” she said.

Leader of Opposition Business in the Senate, Donna Scott Motley said the order aims to protect the most vulnerable members of the population.

Under the Order, the Consumer Affairs Commission (CAC) has been authorised, on behalf of the Industry Minister, to demand that books, accounts and other documents relating to the particular business be provided so that claims of price gouging can be investigated.

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