Pharmacies are among retailers to have been subject of complaints to the Commerce Commission.
Pharmacies are among retailers to have been subject of complaints to the Commerce Commission.
A pharmacy chain run by an NZX-listed firm has received more complaints than any other retailer in the country over the price of its face masks.
Documents released under the Official Information Act show 44 complaints about face masks sold at eight retailers had been lodged to the Commerce Commissionsince the start of the Covid-19 crisis in late March.
That wasn't the total number of complaints received during that time, the commission supplied information on the most complained about traders.
The majority of issues raised in the complaints related to the price of masks.
The high price of surgical face masks has been a hot topic since the onset of the pandemic. The Ministry of Health, Prime Minister Jacinda Ardern and number of high-profile Kiwis, including toy tycoon Nick Mowbray, have raised the issue of price gouging on masks following a surge in demand during the height of the outbreak.
During the national lockdown, and second regional lockdown in Auckland, a box of 50 masks were being sold for more than $50, and a box of 20 for around $62. In some cases single masks were being sold for up to $20.
Approximately 29 complaints the commission received were about the price of masks - the biggest cause of concern, while others related to representations of country of origin, effectiveness and compliance with mandatory standards.
Between March 26 and September 9, the commission received 10 complaints about Unichem pharmacy, owned and operated by Green Cross Health. It also received three complaints about the company's sister brand Life Pharmacy.
Second to Unichem, Countdown supermarket operator Woolworths NZ received eight complaints about its masks and discount pharmacy Chemist Warehouse received four.
Kogan Australia Limited and Biz & Marketing Solutions Limited trading as Medshop New Zealand also received complaints.
Green Cross Health chief executive Rachael Newfield told the Herald the price of masks sold at its pharmacies was dependent on the cost charged by the supplier at the time.
She said a surge in demand and difficulties securing the masks during the first nationwide lockdown had made it difficult to maintain consistent pricing.
"The price the pharmacy purchases the goods at is determined by multiple factors including supply and demand of products, how many are available to be ordered at any one time, stock availability, and all the logistical costs such as freight. During the period there was inconsistent supply, and it changed daily," Newfield told the Herald.
"The supply chain at the time nationwide was under pressure and many pharmacies were struggling to source quality face masks and maintain consistent pricing while keeping up with the surge in consumer demand.
"The Covid pandemic and the following government announcement recommending the use of face masks in public drove unprecedented levels in demand and as a result saw both Green Cross Health centrally, and our licensees independently, trying to source sufficient product to meet our customers' needs nationwide from a vast number of suppliers, the cost of which varied significantly day by day, supplier by supplier."
Newfield said franchisees were able to set their own pricing on product.
"Unichem Pharmacies were not provided any of the government supply for consumer sale which saw them sourcing through existing supply channels and quickly trying to establish new supply channels to support demand."
A spokesperson for Countdown said high global demand for face masks had put a lot of pressure on price and stock levels of the past six months.
"The massive demand for masks globally drives the price we pay for masks, we also have costs such as storage, transport and labour which we take into account in our pricing. When we find cheaper options, we pass these prices onto our customers," the spokesperson said.
Unichem received more complaints than any other retailer. Photo / Andrew Warner
"One of the main brands of face masks we sold was Bactive, which were $54.99 for a 50 pack. We purchased these from the Ministry of Health at $1.03 (incl GST) per mask to ensure we had sufficient availability for customers when the country went back to level 2 and 3 in Auckland. We sold them for $1.09 (incl GST) per mask, which didn't actually cover our costs to get the masks transported around the country and onto shelves. Since then we've been able to source much cheaper masks which are currently $28 for a 50 pack of surgical masks or $7.70 for a 25-pack non-medical mask."
The Herald has also contacted Chemist Warehouse for comment.
Zuru Toys co-founder Nick Mowbray last month told the Herald his company had developed its own low-cost brand of face masks and other medical PPE in response to price gouging that it observed in New Zealand.
Mowbray said the global operation established Bactive, leveraging its manufacturing connections in China, to distribute "fair and reasonable-priced" medical-grade masks in response to "predatory pricing" it observed in the market.
"We saw a lot of predatory pricing, and not all retailers but some of them, there was a bit of price gouging going on, so James and Josh and Matt said 'You know what, let's air freight a bunch down and offer them to New Zealanders at a price that was really low and fair and reasonable," Mowbray said.
