In a bid to curb the spread of corona virus (Covid-19) in Nigeria, the federal government announced the lockdown of Lagos State, Ogun State and the Federal Capital Territory, Abuja, in March 2020.

Unsure of the implications of the lockdown on access to foodstuffs and medical supplies, Nigerians began to panic buy. This had an adverse effect on the prices of foodstuff and medical supplies such as hand sanitisers and face masks believed to be critical to curbing the spread of Covid-19.

Consequently, the prices of foodstuffs and medical supplies soared. The fear of a possible shortage of food in the states affected by the lockdown spread to all the states in the Federation and so did the hike in price. There were concerns that people would die from hunger and not the much-dreaded Covid-19.

In response to these events, the Federal Competition and Consumer Protection Commission (FCCPC) stated that the unwarranted hike in prices of goods amounted to an infraction of the law.

As a result, FCCPC began the prosecution of four supermarkets and pharmacies for price gouging (selling commodities at outrageous prices considered unfair, following a sharp rise in demand or the occurrence of an event such as a disease outbreak).

All the charges filed against the businesses revolved around obnoxious practices in relation to the supply of goods and unreasonable, unfair and unjust pricing.

The reactions of the public to the actions of the FCCPC were mixed. While some people felt the actions of the FCCPC was laudable, others felt the affected businesses were being victimised, since they had not infracted any law. A number of Nigerians did not understand how the hiking of prices could amount to a crime. This article examines the law on this subject.

The primary objective of the Federal Competition and Consumer protection Act is the protection of consumers. It is aimed at ensuring that businesses do not engage in unfair business practices. One of which is the supply or sale of goods at outrageous prices.

The Act expressly prohibits the sale or supply of goods and services at ‘a price that is manifestly unfair, unreasonable or unjust’. A business or individual that offers goods or services for sale at an outrageous or unjust price has infracted the law and may be prosecuted by the FCCPC.

FCCPC - COVID-19, Outrageous Pricing and the Law, Federal Competition and Consumer Protection Commission

In furtherance of its objectives, the Act established the Federal Competition and Consumer Protection Commission (FCCPC). The FCCPC has the mandate to protect and promote consumer interest, eliminate misleading, unfair, deceptive and unconscionable business practices.

In the event of obnoxious practices or unscrupulous exploitation of consumers by businesses and individuals, FCCPC is statutorily responsible for providing redress.

To further guarantee the rights of consumers and prohibit the unjust exploitation of Nigerians through price gouging, FCCPC issued a guideline in April 2020.

The guideline sets out the conduct required of businesses in view of the Covid-19 pandemic and reiterates the need to respect the rights of consumers. It implores businesses to ensure the availability of essential goods and services and cautions businesses to refrain from the undue exploitation of Nigerians.

Non-compliance with the law and guideline in relation to the pricing of goods and services may result in prosecution. While it may seem that producers and suppliers of goods and services are at liberty to fix the prices of their goods and services, the law as an impartial arbiter ensures that such prices are not unconscionable, unjust and outright exploitative.

Failure to comply with the law in the pricing of goods and services is a crime for which a business owner or service provider may be prosecuted.

 

Naija Legal Talk