‘Virus Profiteering’ Running Rampant In Kenya
Denis Gitau  |  May 19, 2020

Albert Einstein once said, “In the midst of every crisis, lies great opportunity”. Unfortunately, the opportunities available are not always in the best interests of the public. Case and point; the advent and progress of the Covid-19 pandemic have led to an ever-increasing number of malpractices by retailers.

This has resulted from factors such as the scarcity of some goods and services brought about by restrictions such as the lockdown imposed by the government.

Closure of some of the country’s border points has made international trade difficult to carry out. As such, there are shortages of goods that were in plenty before the pandemic hit.

However, some retailers are taking advantage of the crisis at hand to engage in profiteering off the virus at the expense of their clients through acts such as increasing prices to unfair levels.

Additionally, Price gouging does not only take place at the retailers’ level but can also happen across the entire supply chain. For example, a manufacturer resorts to price gouging which would result in the retailer selling items at a higher cost to cover the increase in the buying price. Retailers have also resorted to hoarding supplies to create an artificial shortage of goods that are in high demand such as facemasks. This gives them the power to set prices as the demand rises.

The biggest loser in all this is the customer and especially low-income households. These practices are illegal under Kenya’s competition laws. Therefore, those engaging in price gouging and hoarding are violating the constitution and are committing business malpractice offenses as per the Competition Act, 2010 that regulates competition in Kenya.

In March 2020, the Competition Authority of Kenya cautioned suppliers against engaging in “virus-profiteering”. However, even after a local retailer was ordered to refund its consumers an amount that is more than the usual price, a good number of businesses are still engaging in virus profiteering.

Some have even resorted to lowering the quality standards of goods produced to cut on their expenses. By resorting to the production of substandard masks and hand sanitizers, some businesses have been able to make fast cash regardless of the risk this poses to consumers.

The regulatory bodies in place have the authority to investigate and crack down on such practices under Section 31 of the Competition Act. This gives the CAK the power to look into complaints made against any business.

When found guilty, the CAK can take action to reverse the damage done and impose penalties on the perpetrators.