Feb 28 2020 | by OrionW
The Coronavirus Disease 2019 (COVID-19) outbreak in early February in Singapore caused a sharp increase in demand for surgical face masks and other paraphernalia. Some retailers saw the outbreak as an opportunity to make a larger profit by grossly inflating face mask prices. As a result, the Ministry of Trade and Industry (MTI) received several public complaints on retailers Deen Express and 3 Stars and other potential profiteers using e-commerce platforms such as Lazada, Carousell and Qoo10. Under the authority of the Price Control Act (PCA), MTI issued letters of demand to Deen Express and 3 Stars to explain the basis of their selling prices of face masks, including their costs and profit margins. MTI also issued letters to the relevant e-commerce platforms requesting information on the potential profiteers.
3 Stars responded to the demand letter and in February 2020, MTI inspected 3 Stars’ multiple premises. After investigation, 3 Stars apologised and reduced the price of masks and undertook to have greater care in their pricing practices. In view of their apology and price reduction, and due to the global rise of face mask prices, MTI took no further action on the complaint.
The Price Control Act
The PCA was enacted in 1950 to curb profiteering; however, from its enactment in 1950 to 2017, the PCA has only been used twice: in 1973 in response to panic-buying of rice related to the international oil crisis and in 1990 due to a concentration of the pork market.
Under the PCA, the MTI is empowered to examine and require copies of any books, accounts or other documents related to the trade or business of a company and to require the company to provide any other information verbally or in writing. Penalties for failing to cooperate include fines up to $10,000 for a first offence and up to $20,000 for further offences.
The demand letters issued to the companies may be viewed as an initial step in ascertaining whether there is profiteering on the part of the companies and the re-sellers/suppliers using the e-commerce platforms. If it is found that there is gross inflation of prices for a particular item, the Price Controller may fix the maximum price for the sale of any goods in accordance with Section 4 of the PCA. Currently, surgical face masks are not yet “price-regulated goods”.