Behind the Hand Sanitizer and Face Mask Price Hike During the COVID-19 Outbreak

Hand sanitizers and face masks are in short supply amid the massive COVID-19 prevention campaign. Products still available in the market are being sold at astronomical prices.

KOMPAS/RIZA FATHONI

An officer serves mask buyers during the mask market operation that was held by Jakarta Administration-owned market company Pasar Jaya at the Jakmart Pasar Pramuka outlet, East Jakarta, Friday (6/3/2020). The market operation sells masks for Rp 125,000 per box containing 50 masks or Rp 2,500 per piece. Purchases were limited to one box per person with the requirement of showing their ID cards when making a purchase.

Hand sanitizers and face masks are becoming a rarity amid the COVID-19 pandemic. The products’ availability is limited and their prices have soared compared to before the pandemic.

To reduce COVID-19 risks, people are being told to wash their hands as often as possible and maintain personal hygiene. In line with this, liquid hand soaps, hand sanitizers and face masks are becoming a rarity across drug stores, pharmacies, shopping centers and mini markets. Increased demand for these products has led to the scarcity.

They are still available at online shops but the prices are much higher than in retail stores. For instance, a 60-millimeter bottle of hand sanitizer was priced between Rp 11,000 (US 67 cents) and Rp 17,000 before the pandemic.

Many online shop owners produce and sell their own hand sanitizer.

On March 22, 2020, as fears over the pandemic began to rise, the price soared to between Rp 50,000 and Rp 75,000 per bottle.

The 400-percent price hike was logical from an economic point of view. Logically, as demand rises and supply is low, price soars and sellers can enjoy the opportunity to gain huge profits. However, in the current context of the COVID-19 pandemic, fundamental economic logic must be accompanied with a humanitarian spirit.

Also read : Comprehensive, Open Contact Tracing of People with Covid-19 Urgent in Indonesia

Furthermore, many online shop owners produce and sell their own hand sanitizer. Prices vary between Rp 15,000 and Rp 75,000 per 100-ml bottle. This is despite that selling homemade hand sanitizer can be seen as violating the law.

Health Ministerial Regulation No. 62/2017 on licenses for health equipment distribution stipulates that the Food and Drug Monitoring Agency (BPOM) has a regulation on this.

Also read : Physical and Mental Health During COVID-19

KOMPAS/Lasti Kurnia

A man Joint a class in making natural hand gel sanitizer from Amore Natura Skincare Learning Center, online at his home in the Kebun Jeruk area, Jakarta, Thursday (26/3/2020). The online class can make a hand sanitizer for personal use.

The regulation states that hygiene products such as hand sanitizers must be accompanied with production permits for public sale. An overview of products at online shops found that many of the homemade hand sanitizer products do not have a BPOM license.

As the products are unlicensed, it is uncertain whether or not their ingredients and production adhere to World Health Organization (WHO) procedures and requirements.

The WHO suggests that hand sanitizer is alcohol-based and contains more than 60 percent of ethanol or more than 70 percent of isopropanol. Products that do not fulfill these standards are not effective in protecting your hands from viruses.

Meanwhile, producers have said that they will not increase their products’ selling prices, as the products’ market prices are determined by retailers. As product prices at online stores are skyrocketing, this can lead to stockpiling in retailers for reselling purposes.

Protecting one another

Online platforms stand on the frontline against such price-gouging practices. In other countries, online retail service providers have taken bold steps in limiting and blocking price gougers’ accounts.

Online platforms such as Amazon, eBay and Walmart have blocked sellers from increasing the price of hand sanitizers in order to gain profit from the outbreak.

Such a policy has also been imposed on sellers of face masks and antiseptic wet tissues. Some of the online platforms have gone as far as preventing sellers from offering these three products during the outbreak.

Also read : Finance Needs to be Well Arranged so that the “Work from Home” Policy will not Cause an Increase in Spending.

KOMPAS/RADITYA HELABUMI

Residents choose masks made from fabric that are sold in the Asemka Market, Tamansari, West Jakarta, Thursday (19/3/2020). Using a mask made from cloth is an alternative for residents when medical masks are in shortage amid the pandemic.

Social media giant Facebook, which has an online shop feature, has also imposed similar strict rules. On its official website, Facebook says that it prohibits sales of medical equipment at unreasonable prices.

Facebook CEO Sheryl Sandberg has also announced on its private account that Facebook plays an active role in supporting social distancing in the workplace and curbing the spread of hoaxes.

The decision was made following a The New York Times viral investigative report of hand sanitizer sellers who stockpiled 17,700 bottles of the product at their warehouse.

Matt Colvin, one of the hoarders, drew widespread anger online due to his action. He then admitted that he had difficulties selling the products online as online platforms no longer allowed him to do so.

Citing data from Amazon, The New York Times found that the selling prices of the three products (hand sanitizers, N95 masks and antiseptic wet tissues) began to increase in late February 2020. At the time, Amazon had yet to limit or block sellers despite prices having soared.

Eventually, Colvin donated all of his hoarded hand sanitizers to people around his house in Tennessee, the United States. The finding then moved Tennessee Governor Bill Lee to issue an executive order on March 12, which included a price-gouging law. Under the law, price gouging is constituted as a crime.

In fact, the price-gouging phenomenon has attracted the attention of the Competition and Markets Authority (CMA), which oversees prices of goods and services in the US.

On its official website, the CMA gives a statement that urges the US government to study and make new policies on price gouging. The statement was made in order to stabilize supplies of goods and services for consumers.

KOMPAS/RADITYA HELABUMI

Passengers wear face masks as they wait to board trains for Central Java and East Java at Pasar Senen Station, Jakarta, Wednesday (25/3/2020). It is feared that the movement of Jakarta residents to their places of origin will further spread the Covid-19 outbreak.

In people’s hands

In Indonesia, only the National Consumer Protection Agency (BPKN) has issued an official statement on the scarcity of certain goods. In a press release on March 2, 2020, the BPKN warned the government to take strategic steps in protecting consumers amid the outbreak. In the circular, the BPKN urges the government to take measures to protect the country’s macro economy.

Despite coming a little late, Indonesian online retail service providers have imposed strict actions against sellers seeking to profit from selling hygiene and health products during the outbreak.

On March 23, 2020, Tokopedia announced that it had permanently banned thousands of sellers and the display of tens of thousands of products.

Other than soaring prices, news of increasing exports of Indonesia-produced face masks can lead to a scarcity in domestic supply. Statistics Indonesia (BPS) has recorded a significant increase of face mask exports, including category HS 63 or other textile products. The total value of face mask exports reached US$2.1 billion in January 2020 and US$75 billion in February 2020.

In response, the government through the Trade Ministry has issued an export ban and an import policy for face masks in order to maintain domestic stock. It is unclear how long the new policy will be in effect.

As the government is increasing its healthy life campaign, people are having difficulties buying liquid hand soap, hand sanitizers and face masks.

In the end, the people as consumers are forced to help in the initiative to wisely to fulfill demand. Homemade hand sanitizers are a safe choice to avoid price-gouging practices. Furthermore, clean and healthy behavior is a must given the current situation.

(KOMPAS R&D)