With rapid antigen tests now becoming a big part of day-to-day life, suppliers and the Government's consumer watchdog are hopeful no price gouging on tests will be seen in the marketplace as was the case in Australia during its surge in Omicron cases.
The Government gave the green light for the sale of rapid antigen tests (RATs) at the end of last week. RATs are available at some pharmacies now but these will become widely available to purchase from mainstream retailers and supermarkets from early next week.
Eleven different brands of RATs have been approved for sale in New Zealand. In Australia, 32 different tests have been approved. Retail NZ is hopeful more tests will be approved for public use to broaden the supply pool in order to keep costs down.
During the height of Australia's surge in Omicron cases earlier in the year, the prices of some RATs were marked up by more than 20 per cent, and the Australian Competition and Consumer Commission received over 1800 complaints regarding price gouging.
Consumer NZ says it has had a few concerns raised about the early pricing of RATs in the marketplace in New Zealand. However, for now it is "keeping its eye" on the marketplace and encouraging retailers to sell them at a reasonable price.
Consumer NZ has conducted a small study looking into the prices of RATs available on the market. It says $10 is a reasonable amount to pay for a single rapid antigen test.
From next week New World and Pak'nSave will sell five-packs of RATs for $32.99. Chemist Warehouse is selling a five pack for $44.99, Grab One is selling a five-pack for $50 and Warehouse Stationery currently has a five-pack for $31.99. Some online retailers are selling a single test for $17.
Consumer NZ had not seen any extreme examples of price gouging at this stage, but it did expect supply issues, Caitlin Cherry, head of content at Consumer NZ, told the Herald. Price gouging of RATs got so bad in Australia that at one stage, in an extreme case, a two-pack of tests were on sale for A$500. In other stores they were sold for upwards of A$25 per test.
"We wouldn't want to see a repeat of what happened in Australia with massive markups, and we're hoping that supply will be consistent so nobody has to do that," Cherry said.
A spokeswoman for the Commerce Commission said MBIE had set up PriceWatch so that consumers could report any pricing concerns.
"MBIE will be referring any that the Commission could take action over to us. The Commission will be monitoring the situation and continue to work with the relevant agencies," the spokeswoman said.
Greigh Mehlhopt, managing director Supply Hub - an Auckland distributor that imports the Government-approved Ecotest manufactured in China, does not believe price gouging on RATs would be an issue in New Zealand.
Supply Hub's Ecotest is a nasal RAT that gives a result in 15 minutes. Its source factory in Guangzhou is capable of manufacturing one million RAT units a day.
"At the moment there are good flights out of China. Unless [New Zealand has] issues with getting the tests here and if we can keep the supply chain flowing I don't think that will happen," Mehlhopt told the Herald.
"Capacity has increased from what Australia was at. Their cases [and demand] effectively spiked and the supply chain in place wasn't able to deal with it whereas I think we've done that and our Government has bought in more than the Australian government did - they left it all to private enterprise, so that should effectively soften the supply shortage.
"People like us, and I'm sure others, can do a million tests a day."
Supply Hub has sold one million of the tests over the past four weeks to Auckland Airport, Contact Energy, Griffins, Panasonic, Turners & Growers, Silver Fern Farms and Yellow to screen their workforces, as well as Foodstuffs for the resale in its supermarkets.
A number of schools including Auckland Grammar, Diocesan, Sacred Heart College, St Peters Cambridge, Kristin School and Medbury School have also purchased tests.
About 10 million of the Ecotests have been sold into Australia since September.
Foodstuffs is the only reseller Supply Hub is selling the tests to. Mehlhopt said he is pleased it will be selling them at almost cost price. He said Foodstuffs' commitment to sell the tests at almost cost price would set the price and "level the market".
Aimie Hines, manager of public affairs and policy advice at Retail NZ, said she did not believe New Zealand would experience price gouging on RATs like Australia had.
"What we're seeing is there will be a variation in price at first. There will be some retailers like the chemist that have stock in the country that they are trying to pass on to customers that are slightly at a higher price than what we'll see the retail price coming from next week.
"Prices may sit a little higher at some stores, but I think that because it was only announced on Thursday that retailers could sell RATs and they are trying frantically to get stock into the country which means airfreight, and that's significantly higher at the moment. That first lot of RATs will have an airfreight price on it and there will be orders that will be followed up that will come via sea freight that will have a slightly different price point," Hines said.
She said the price of RATs would likely fall in the weeks ahead if supply remain consistent.
"We're working closely with officials to try and get the number of suppliers that are approved RATs in New Zealand to be a far wider pool so that we can try and bring those prices down further, and it means we have a variation of supply we can bring into the country."
Hines said retailers largely were not looking to make profits from the sale of RATs, with many wanting to sell at cost price such as the commitment Foodstuffs had given. "The biggest concern at the moment is demand and our message is not to stockpile tests. It is good to have a set on hand but don't panic-buy them."