The supply and demand curve is a well-established rule which usually allows those with the supply (to an extent) to dictate prices when demand is high.
To date, markets have largely been left to regulate prices, however, in these unprecedented times, the Competition and Markets Authority (CMA) has issued guidance and a warning to those taking advantage of the situation.
In a situation where it appears that the downsides and risks are outweighing opportunities for most businesses, it is tempting to try to recoup some losses by charging more for various items.
That guidance states that the CMA ‘will consider any evidence that companies may have broken competition or consumer protection law, for example by charging excessive prices or making misleading claims about the efficacy of protective equipment. And it will take direct enforcement action in appropriate cases.’
The CMA Chief Executive Andrea Coscelli went further and said, “We urge retailers to behave responsibly throughout the coronavirus outbreak and not to make misleading claims or charge vastly inflated prices. We also remind members of the public that these obligations may apply to them too if they resell goods, for example on online marketplaces.”
We’ll watch this space as the CMA considers whether to the Government should consider taking action to legislate to regulate prices and whether the threat of action against those vastly inflating prices will be investigated and prosecuted.
In the meantime, caution and detailed consideration is advised before any vast inflation of prices and as ever, descriptions of products must meet all the normal regulatory rules, particularly relevant to any protective clothing/equipment at the moment.
If you are concerned about raising or rising prices, or any description on goods sold please get in contact with our Commercial or Regulatory team.
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