Australian Federal Police Launch Investigation Into RATs Price Gouging

The Australian Federal Police badge is seen in Canberra, Australia on Jun. 6, 2019 (Photo by Getty Images)

The Australian Federal Police has launched an investigation into rapid antigen test (RAT) price gouging and has warned that individuals and businesses selling COVID-19 tests for more than 20 percent of the original retail purchase rate will face five years’ imprisonment or a $66,000 fine.

AFP Assistant Commissioner Crime Command Nigel Ryan said there would be zero tolerance for those who were profiting from RATs at the expense of the Australian public.

“The AFP will use its full powers to crack down on RAT price gouging. Not only is price gouging of RATs unethical, but it is illegal, and the AFP will use its significant resources to ensure it protects the public from the unlawful greed of others,’’ Ryan said in an AFP statement released on Friday.

AFP will be coordinating with state and territory law enforcement, Commonwealth agencies and international partners for this investigation.

This news follows the announcement that the Australian Competition and Consumer Commission (ACCC) will also be investigating the allegations of price gouging on Jan. 4.

The Australian consumer watchdog stated that it would crack down on price-gouging of RATs during the nationwide shortage following consumer reports since Dec. 25.

As of Jan. 17, the ACCC has received over 1,800 reports from consumers about rapid antigen tests, averaging 150 reports per day.

“At the extreme end, we have received reports or seen media coverage of tests costing up to $500 for two tests through online marketplaces, and over $70 per test through convenience stores, service stations and independent supermarkets, which is clearly outrageous,” ACCC Chair Rod Sims said in a statement released on Jan. 17.

The price gouging concerns came as rising Omicron case numbers in the early stages of the outbreak resulted in unmet demands for PCR tests, which placed pathology labs under tremendous pressure with some labs temporarily closing to cope.

Social media posts showed that some retailers were selling RATs for as much as AU$45 (US$32) for a kit that usually costs AU$10 to $15 for retail price with a wholesale cost that range between $3.95 and $11.45 a test.

In a statement released today, the AFP announced that two investigations have begun in Queensland and New South Wales (NSW) after referrals from the ACCC.

Most consumer reports received by the ACCC about businesses selling RATS are from NSW, with more than 90 percent of the reports related to the prices of the tests.

The AFP expects more referrals with its Taskforce LOTUS responsible for coordinating the investigations.

According to the Department of Home Affairs Taskforce LOTUS (pdf) was created in February 2021 to respond to persons and organised crime entities who plan to

commit criminal acts related to the rollout of the COVID-19 vaccine in Australia.

Taskforce LOTUS has the power to investigate claims of RATs price gouging when a retailer or individual buys RATs from another retailer and re-sells with a mark-up of more than 20 percent. However, this power will not apply to retailers who buy from a wholesaler.

AFP stated that Taskforce LOTUS would refer allegations of RAT price gouging to Australia-wide AFP strike teams; such teams have the power to force individuals or businesses engaged in price gouging to surrender the RATs will be sent to the National Medical Stockpile.

Allegations of the illegal import or export of essential medical goods, including RATs and PPEs, will also be coordinated under Taskforce LOTUS.

As of Friday, the AFP has not seized or surrendered any RATs, PPE or other relevant medical supplies to the National Medical Stockpile.

The supply shortages and costs of the RATs have resulted in criticism by the public and the Opposition Leader Anthony Albanese of the Australian Prime Minister Scott Morrison.

Despite public pressure for the RATs to be free during a nationwide shortage, Prime Minister Scott Morrison has maintained that tests will only be free for those that need to be tested and subsidised for concession cardholders.