CPG Industry Asks Attorney General to End Coronavirus Price Gouging

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CPG Industry Asks Attorney General to End Coronavirus Price Gouging

By Bridget Goldschmidt - 03/09/2020
CPG Industry Asks Att’y General to End Coronavirus Price Gouging
Consumers have experienced supply shortages of high-demand consumer products such as face masks, which were sold out at a Chicago Walgreens

The Consumer Brands Association (CBA) has appealed to U.S. Attorney General William Barr to shield Americans from what it calls the price gouging of key consumer packaged goods (CPG) during the coronavirus outbreak. According to the Arlington, Va.-based trade association, the U.S. Department of Justice (DOJ), working through the National Center for Disaster Fraud, could better coordinate with federal, state and industry partners — in particular state attorneys general — to help discourage and mitigate the practice.

“Consumer Brands fears price gouging for consumer products — which has been on the rise in recent weeks — could prevent consumers from obtaining the preventative consumer products they need to protect themselves from the spread of COVID-19,” explained CBA EVP of Public Affairs Bryan Zumwalt in a March 9 letter to Barr. “Consumer Brands urges the DOJ to collaborate with federal, state and industry partners to take all possible actions to counteract price gouging of consumer products needed to prevent the spread of COVID-19.”

According to new CBA research, 24% of Americans have noticed price gouging on high-demand consumer products such as hand sanitizer, nonperishable foods, cleaning supplies, and bottled or canned beverages. In response, 88% have sought to report price gouging to the government.

“The CPG industry is unequivocally opposed to price gouging and works every day — crisis or not — to ensure consumers have access to the affordable products they rely on,” noted Zumwalt. “Price gouging undermines that mission and, in the case of a pandemic, is a threat to public health.”

More than half (53%) of Americans have already, or have plans to, stock up on products in anticipation of the possible threat of coronavirus, the research found, with most (89%) of believing the government should be doing more to protect against supply chain disruptions of needed consumer goods during times of national crisis.

“The CPG industry is increasing production of essential products, but the coronavirus is a stress test on our supply chain — making it apparent that the government must help where it can,” observed Zumwalt.

CBA also found that 37% of consumers have experienced a supply shortage or purchasing restrictions on high-demand consumer products, and another 28% said that friends or family have encountered such shortages. Some retailers are limiting the number of high-demand items a consumer can buy at one time, which may help keep critical products on store shelves.

CBA is also working with the recently formed Congressional Supply Chain Caucus to help develop strategies to mitigate global supply chain disruptions caused by stressors such as the coronavirus.

“We can’t play catch-up when disaster strikes,” said Zumwalt. “The government must be proactive in its supply chain policy. The government should step in to protect consumers by ensuring bad actors cannot take advantage of a crisis through exploitative pricing of essential products.”

The CBA’s website lays out additional ways that the industry is responding to the coronavirus situation.