Abigail Sinden
Associate Solicitor
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Date Published:03 Apr 2020 Last Updated:28 Jul 2021

Thinking of raising prices during Covid-19? Think again!

Business Services

As the UK continues to be in ‘lockdown’ as a result of the COVID-19 pandemic, many businesses are struggling to cope and remain afloat during the crisis. However, businesses should avoid the temptation to hike up prices during this unprecedented time. I was shocked to see a social media video of a newsagent in London which was selling small packs of toilet roll for £9.99.

Due to the extreme increase in demand for certain household items during the pandemic, such as cleaning products, hand sanitiser, toilet roll and face masks and with the desire to increase cash flow, sadly a number of businesses are taking drastic measures by exploiting and profiteering from the COVID-19 crisis.

On 5 March 2020, the Competition and Markets Authority (CMA) released a statement urging retailers to behave responsibly and confirmed it would be reviewing any evidence that businesses have breached competition or consumer protection law. Subsequently, on 20 March 2020, the CMA announced that it has launched a taskforce to “tackle negative impacts within its remit of the COVID-19 pandemic”. The taskforce will:-

  1. monitor market developments and identify harmful sales and pricing practices;
  2. warn businesses suspected of exploiting these exceptional circumstances and people’s vulnerability through misleading claims and excessive pricing;
  3. take enforcement action if there is evidence that businesses may have breached competition or consumer protection law; and
  4. work with the government and advise whether any necessary emergency legislation and/or any measures are required to ensure markets function as well as possible through the crisis.

The CMA has also recently advised the government with ensuring competition law does not scupper legitimate activities that protect public health and support the supply of essential goods and services. For instance, competition law has been relaxed to enable competing supermarkets to work together on the monitoring of stock levels and the sharing of distribution depots and delivery vans for the purpose of “feeding the nation”. Under normal circumstances these activities would be considered anti-competitive and therefore unlawful.

Businesses looking to profiteer from the Covid-19 pandemic should think again. Not only is this a time for people and businesses to support one another, but the CMA will be closely monitoring market developments and may contact any business who is acting unreasonably during the pandemic. The CMA has a range of options at its disposal, including issuing warnings, taking enforcement action which could include fines and seeking emergency powers. Should anyone have any concerns about a business who may be taking advantage of the current climate, they should email the taskforce at covid.monitoring@cma.gov.uk

Please contact Abigail Sinden, Solicitor in our Business Service department on 01202 525333 or by email should you have any questions or queries.