Frydenberg raises rapid antigen test pricing concerns with ACCC but doesn’t order formal inquiry

The Guardian
The Guardian
Federal treasurer Josh Frydenberg Photograph: Joel Carrett/AAP

Josh Frydenberg has spoken to the Australian Competition and Consumer Commission chair Rod Sims about concerns some suppliers are charging sky-high prices for Covid-19 rapid antigen tests.

However, ACCC staff, including Sims, are currently on holiday and do not return to work until Tuesday. The regulator is also limited in action it can take because it does not have the power to set prices and the treasurer has decided not to order it to conduct a formal inquiry.

It comes amid reports of soaring prices for RATs, which Scott Morrison this week said should be used by people concerned about whether they had Covid in order to take pressure off the public testing system, which delivers the more reliable but much slower polymerase chain reaction tests. There are reports overwhelmed pathology labs are taking as long as six days to return PCR results.

Related: Covid rapid antigen tests: suppliers deny pressing PM to abandon commitment to provide free kits

On Thursday, the prime minister ruled out making RATs free to all, despite pledges by the New South Wales and Victorian governments to hand them out. Morrison said this was a result of “concerns” raised by industry that they would be undercut by free tests, but industry groups denied lobbying for the change.

“The treasurer has spoken to the ACCC chair and he is aware of the government’s concerns regarding rapid antigen test pricing,” a spokesperson for Frydenberg said.

Frydenberg has not instructed Sims to use his power to hold a formal inquiry into RAT prices. These inquiries have in the past looked at medium and long-term pricing problems and take “months or in some cases, years” to run, the spokesperson said.

Morrison on Wednesday said Frydenberg would pursue the issue with the ACCC and on Thursday the health minister, Greg Hunt, said the government would take “strong, clear, swift action” if it uncovered evidence of price gouging.

The ACCC does not have the power to fix prices and can only take legal action over high prices if suppliers are colluding, misleading the public or prices are so high as to be unconscionable.

Allan Fels, a former ACCC chair, said that the regulator could “expose and shame” price gougers.

“They can do what are called market studies, where they identify high prices and their cause, and then they recommend things to the government,” he said.

“The main powers of the ACCC are probably exposure or recommending direct government action.”

Related: What are the new rules in Australia on Covid isolation, close contacts and testing?

The president of the Pharmacy Guild of Australia, Trent Twomey, said chemists were not responsible for soaring RAT prices.

“So I was making $4 on a test three weeks ago, and I’m still making $4 on a test even though they’ve gone up $10 to the consumer,” he said.

“That’s because my cost price has gone up $10.”

An ACCC spokesperson said the regulator would “investigate any evidence of price collusion and take appropriate action”.

“The ACCC can publicly call out any suppliers which seem to be exploiting the shortage of rapid antigen tests,” the spokesperson said.

“Under the Competition and Consumer Act excessive pricing may, in certain circumstances, constitute unconscionable conduct. Any such case would need to be ultimately decided by a court.”

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