CAK warns firms as prices of sanitary products shoot up

Tuskys supermarket cashiers wear precautionary face masks and gloves while attending to customers. [Elvis Ogina/Standard]

Manufacturers and retailers capitalising on the coronavirus pandemic to hike prices risk hefty fines of up to 10 per cent of their annual turnover, the competition watchdog has warned.

The warning came amid a reported price increase of almost 700 per cent for key items used for protection against the spread of the virus.

A spot check by The Standard showed that surgical masks are retailing at Sh3,000 a pack in pharmacies, with a number of outlets running out of stock. A box of surgical masks previously cost around Sh350.

A pack of gloves was selling at around Sh500. Hand sanitisers that were retailing at Sh300 per bottle was Sh1,400 yesterday at a city chemist.

The sanitisers and spirits are on high demand and are unavailable on many retail shelves.

The spike in prices follows panic buying in supermarkets since the first case of Covid-19 was reported in Kenya last week, which has led to shortage of the protective items. 

The Competition Authority of Kenya (CAK) said it was aware of “collusive” plans by retailers and manufacturers to raise prices or hoard various consumer goods to shore up their prices.

“It has come to the attention of the authority that following a pronouncement by the government of a confirmed coronavirus (Covid-19) case, some manufacturers and retailers are contemplating collusive increases of prices and, or hoarding with the intention of subsequently increasing prices of various consumer goods,” said CAK Director General Wang’ombe Kariuki.

He said the action by the firms contravened the Competition Authority Act, which attracts a penalty of up to 10 per cent of the respective annual turnover of the manufacturers and retailers in question.

Hand sanitisers topped the list of the most bought items in supermarkets since the virus landed in Kenya.

Supermarkets such as Tuskys are restricting customers to not more than three pieces of handwash and sanitisers.

Dispelled fears

Noting the spike in panic shopping, Tuskys Group Chief Executive Dan Githua earlier dispelled fears that they would soon run out of essential commodities, or that prices would go up.

He said their suppliers had given commitments that they would keep supplying goods at the same “standard” price.

“For more than 90 per cent of the general supermarket merchandise we have enough in-country stocks and manufacturing capacity to meet local demand,” said Mr Githua.

The coronavirus has caused over 5,000 deaths globally and has since been declared a pandemic by the World Health Organisation.

Despite being a boon for traders in protective gear, the coronavirus has severely damaged other businesses, especially those that import goods. 

China, which is currently in lockdown, accounts for about 21 per cent of Kenya’s imports, meaning at least Sh366 billion worth of products may need to be sourced elsewhere or substituted by local production due to the Covid-19 disruption.