In safe hands? UK CMA investigates excessive pricing of sanitiser products

The UK’s Competition and Markets Authority (CMA) has launched investigations into four pharmacies and convenience stores suspected of charging excessive and unfair prices for hand sanitisers during the COVID-19 pandemic.

While details of the suspected infringements are naturally scarce at this early stage – and there is no guarantee the CMA will go on to issue a statement of objections – these investigations touch on what is clearly a priority concern for the competition watchdog. 

As we reported back in April, analysis of complaints raised by consumers to the CMA’s COVID-19 Taskforce recently found that the median price of hand santiser products had increased by 367 per cent since the onset of the pandemic. 

And last month the Taskforce reported that it had written to more than 250 traders in relation to over 3,000 consumer complaints linked to price rises.

A statement of intent? 

While the CMA might rightly feel compelled to investigate unfair pricing practices regarding essential products sold during a period of national crisis, it is notable that these investigations come just three months after the UK Court of Appeal handed down its highly anticipated judgment in Flynn Pharma. 

The appellate court clipped the watchdog’s wings in that judgment by refusing to reinstate fines totalling £89.4m that the CMA had imposed on two pharmaceutical companies for excessive and unfair pricing of an anti-epilepsy drug.

COVID-19, of course, presents a very different context, and the CMA appears to be backing up its statement of intent to intervene in the interests of consumers during the crisis. It is showing a willingness to exercise its full suite of powers to do so: this report of potential competition enforcement follows hot on the heels of it agreeing undertakings regarding COVID-related travel refunds, using its consumer powers. 

Competition enforcement, of course, brings with it its own range of potential legal and practical challenges (as the Flynn Pharma experience shows), and how the CMA will go about establishing the four (presumably small) retailers’ dominance in their local markets and obtaining sufficiently granular historical data remains to be seen.