Coronavirus: How to dob in price-gouging retailers during the lockdown

Retailers who increase their prices during the lockdown won't be breaking the law unless they lie about their motivations, says watchdog Consumer NZ.

There have been sporadic reports of price-gouging since most of the country's shops shut their doors this week in an attempt to stop the spread of SARS-Cov-2, the virus which causes COVID-19.

Already it's taken more than 23,000 lives since emerging in China late last year. New Zealand is yet to have any deaths from the virus, which is particularly harmful to the elderly. There have been 283 cases confirmed so far, rising by dozens every day as infected Kiwis rush home from overseas.

Supermarkets are one of the few types of store allowed to remain open while New Zealand is at pandemic alert level 4, as they provide many essentials. But there have been reports of bread going for $8 a loaf, cauliflower for $14 and fresh whole chicken for $30. 

"We have been getting complaints for a few weeks now," Consumer NZ head of research Jessica Wilson told The AM Show on Friday.

"The main complaints we're getting are around things like hand sanitiser, facemasks - people are walking into the chemist and finding products on sale for $50, $60. Something they used to pay $4 for is now hugely inflated."

Data from Statistics NZ shows cauliflower's price usually fluctuates between $2.50 and $6. It spiked beyond $8 in March 2018. There doesn't appear to be any trend of price spikes in previous years in March - in the past 10 years, there have been price spikes in months as disparate as August, April, May, September and January.

The Prime Minister has warned retailers not to price gouge just to make a buck, even asking for names of specific shops to be handed over to her when it's been mentioned in press conferences. 

"It is not acceptable to do what they call price-gouging. That is not allowed so we will be keeping a very close eye on where we might see those issues."

But when is hiking the price fair, and when is it gouging? 

"The problem is price-gouging per se isn't illegal," said Wilson. "What is illegal is to mislead consumers about the reasons why prices are going up. That would be a breach of the Fair Trading Act... in that case you could complain to the Commerce Commission. 

"In other cases, if any consumer's seeing price hikes they think are a bit on the nose, let us know and we'll try and take a look at it."

The Government has repeatedly sought to assure Kiwis there is plenty to go around, trying to prevent a repeat of the hoarding that took place before the lockdown came into force. Wilson said since there are no issues with supply, you can't blame supply and demand for the price hikes.

"Not in our view. Don't blame supply and demand if you are hiking the price of essential goods to prey on consumers' concerns. That is not supply and demand - that is price-gouging."

She said if you see someone raising prices unfairly, snap a photo of it and let them know - or, as she explained above - contact the Commerce Commission.