Consumer watchdogs have been fielding complaints of prices for some grocery items creeping up during lockdown. Supermarkets are defending themselves.
This week Pak 'n Save shopper Elizabeth Berry came across a pack of 25 face masks selling for $22, a considerably higher price than what it normally retails for.
The same box, by the same brand, Health Warrior, was being sold for $7.70 at competitor, Countdown.
Berry took to social media to post her concerns, saying Foodstuffs, the owner of Pak 'n Save, ought to be "disgusted" by the supermarket's price hiking while in lockdown.
Foodstuffs wasn't aware of Berry's complaint when it was approached for comment, but later in a statement spokeswoman Antoinette Laird said the price of masks was “incorrectly loaded” on the system and the Invercargill Pak ‘n Save store was changing it to the intended price of $7.49.
“Prices of masks will vary from store to store as they come from a variety of accredited sources, in different designs and pack sizes, all of which can affect the retail price of the mask.”
Laird said the supermarkets had not increased prices as a result of Alert Level 4 and promotions were running as normal.
“Prices do vary and there are a few factors that play into this including weather, seasonality and if the product is on or off special. New Zealanders are doing bigger, less frequent shops while in lockdowns and the total at the till will reflect this,” Laird said.
Berry was among a growing list of consumers reporting complaints to consumer watchdogs.
The Commerce Commission has received more than 60 complaints from shoppers since August 18 alleging certain retailers (including supermarkets) had increased prices over lockdown.
A spokeswoman for the Commerce Commission said this was a “noticeable” increase in the volume of enquiries we would normally receive about this type of conduct.
“We are assessing whether any of these enquiries raise possible concerns under the Fair Trading Act,” she said.
While businesses were free to set their own prices, and hiking prices wasn’t illegal, the Fair Trading Act prohibited misleading and deceptive conduct and false representations.
But consumer protection organisation Consumer NZ believed price gouging should be illegal.
Its head of research, Jessica Wilson, said the number of complaints on price increases was growing day by day over lockdown.
“We’re starting to get complaints from consumers who have noticed increases in the price of some goods since the latest lockdown. We’ll be looking into these complaints.
“It is illegal to mislead consumers about the reasons why prices are going up. Where those reasons aren’t genuine, companies risk breaching the Fair Trading Act and a fine of up to $600,000,” Wilson said.
Consumer NZ was encouraging consumers to contact the consumer watchdog or the Commerce Commission if they spotted a trader doing the wrong thing.
But the rate of complaints this year had been significantly lower than last year.
During the first lockdown last year, consumers were stockpiling necessities like toilet paper, baking items and household cleaning products. As a result, the supermarkets placed restrictions and limits on how much consumers could buy at a time.
Last year in the first few weeks of Level 4, Pricewatch received more than 2000 enquiries. But during this year's Level 4 lockdown it had received 316 enquires in two weeks.
A spokesman for the Ministry of Business, Innovation and Employment, in charge of Pricewatch, said complaints had been "relatively low and sporadic".
"We have not identified any regional or category trends that have led to any particular sector engagement.”
None of the complaints had been referred to the Commerce Commission for potential breaches of the Fair Trading Act so far, he said.
“Businesses themselves may be experiencing supply chain delays and price increases at the moment. We’d encourage businesses to let customers know if they may experience delays or price increases.”
Auckland man Wayne Leith said he doesn't typically post on social media but said the price of fresh produce had gone up - particularly mushrooms, lettuce, carrots and broccoli.
“Prices at Countdown have not changed due to the lockdown." –Kiri Hannifin, Countdown
Leith said it was difficult to prove whether prices had gone up or if supermarkets had removed discounts. “I'm kicking myself now, I wish I'd actually kept dockets over the years just to show what's going on.”
But supermarkets maintain there has not been a shortage of products and prices weren't increasing.
Countdown spokeswoman Kiri Hannifin said the supermarket hadn't increased prices because of lockdown, and the supermarket chain had 9000 products on special.
"Prices do of course change from time to time due to things like the weather, seasonality, supply and demand, global shipping challenges and cost increases from suppliers, but ... we have not increased any product prices as a result of the Alert Level 4 lockdown.”
Customers have also been complaining about online deliveries arriving without the goods they ordered.
Hannifin said in the first week of lockdown the company delivered 20,000 orders to priority assistance customers and it was working on making more delivery windows open every day.
However, on Wednesday the Ministry of Health added about 40 supermarkets to its locations of interest list. Seven Countdown stores had to close last week for deep cleaning because they were locations of interest.
Hannifin said more than 2000 of its workers had been unable to come into work and over 1000 are still out of action on any given day due to their store being a location of interest, having a household member at a location of interest, not having childcare available or because they are vulnerable to Covid-19.
Last week, Countdown had sent more than 1.7 million cartons of food and groceries to stores and bought an extra 285 tonnes of potatoes, 105 tonnes of carrots and an additional 350,000 avocados from growers.
A Foodstuffs spokeswoman said none of its stores had been closed and refused to answer other questions on price increases.
“The business is managing the increased consumer demand a lockdown brings in much the way we have done previously ... and the supply chain team are working to carefully manage supply across the store network so there is enough for everyone.”
Grower Ajay Jina, of Jina's World of Fresh Produce in Lower Hutt, said the Level 4 lockdown warped supply and demand, making it difficult to decisively say whether prices of produce had gone up.
“The market at the moment is completely distorted with lockdown,” Jina said. “There's some products that are very cheap, but there are some products that are very dear. And there's a reason for that is certain products don't get used as much as others during the lockdown.”
“Businesses themselves may be experiencing supply chain delays and price increases at the moment. We’d encourage businesses to let customers know if they may experience delays or price increases.” – MBIE
He said it had been very difficult for growers to gauge future supply and demand and the outbreak had also affected all parts of the supply chain.
Restaurants and cafes closed during Level 4 drove down demand, which resulted in growers driving tractors over fruits and vegetables to feed the soil.
“It's a complete waste. I mean, they don't grow these things and put them back into the ground, they grow these things so they can sell them so that people can eat them.”
The one thing Jina was certain about was that this lockdown would be the death of many businesses because of the compounding pressure past lockdowns and ongoing supply chain issues (including the rising price of power and rent) had put on firms.
“Sadly we’ll see cafes and restaurants go under and that will change demand as well. These things have lingering effects.
“This is tough stuff. You're trying to run your business and keep your staff going even though we haven't got all the work for them. We have to basically hold our breath until we can get back to back to treading water.”
He said although towns and cities south of Auckland were in Level 3 as of Wednesday, the country’s most populated city being in lockdown would continue to distort supply and demand.
