Pricey face masks spark 240 complaints to Government watch dog

Wednesday, 19 August 2020

Aucklanders are being asked to wear a face covering when outside the home, and the rest of the country is advised to wear one when in a confined public space, like when using public transport or a supermarket.

The rising cost of face masks has sparked 240 complaints to a Government pricing watch dog since Covid-19 alert levels ramped up last week.

Prices for boxes of 50 disposable masks vary considerably between different brands, with Life Pharmacy’s online site charging $79.99 compared to $24.99 for those available through the Off the Back website.

The Ministry of Business Innovation and Employment’s national manager consumer protection Mark Hollingsworth said it was working with businesses to understand the reasons for price rises.

MBIE’s Price Watch service can refer cases of exploitative pricing to the Commerce Commission which had received 15 complaints about face mask prices by Monday.

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Boxes of 50 masks being sold for $54.99 at Countdown in Pt Chevalier, Auckland on August 9.

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A poll of 1200 New Zealanders last week by the Finder website found that about 70 per cent owned a face mask, with blue surgical masks being the most popular.

A spokeswoman for the commission said businesses were free to set their own prices, and increasing them above previous levels was not illegal.

However, the Fair Trading Act prohibited misleading and deceptive conduct and false representations, and businesses giving false reasons for a price increase risked breaking the law.

Zuru supplies the Ministry of Health with face masks imported from China, and on Friday the company launched a website selling a box of 50 disposable masks for $34.99, including postage.

The Ministry of Health said it charged Countdown $1.03 each for face masks it supplied the supermarket chain last week from its stockpile of PPE.

Global business development manager Josh Rippin said they had so far sold more than 75,000 masks, mostly to North Islanders, and customers included smaller retailers and pharmacies.

He said they were concerned at the price gouging that was going on, as well as the low quality of some product on the market.

Face coverings come in all shapes, colours and sizes on the streets of Auckland.

“We’re pretty blown away that retailers are charging these prices.

“We decided to set up our own e-commerce platform so Kiwis had access to masks at a fair and reasonable price,” Rippin said.

Countdown supermarkets are selling boxes of 50 masks for $54.99, but general manager corporate affairs Kiri Hannifin said they were not making a profit on the masks.

“There is huge global demand for masks at the moment which is putting pressure on prices, and we also have costs such as transport and labour to cover, which we take into account in our pricing.

“Specific details on pricing or stock are commercially sensitive.

“We’ve put a limit of one per customer on masks bought in our stores nationwide, to help discourage people from stockpiling and manage demand.”

The Ministry of Health confirmed that last week it was asked to supply Countdown with 2 million masks.

The supermarket paid $1.03 each, the average cost of masks sourced during April which was the stock on hand.

The ministry said world mask prices fluctuated all the time and it was not able to comment on the price per box of 50 masks Countdown was selling.