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Higher prices not necessarily evidence of price gouging, store manager says

hand sanitizer.JPG
Posted at 7:04 PM, Apr 06, 2020
and last updated 2020-04-06 20:56:03-04

INDIANAPOLIS — The Indiana Attorney General’s Office has received 160 complaints about price gouging from Indiana consumers about stores, gas stations, grocery stores and online retailers.

However, just because a retailer is selling a product at a higher price doesn’t necessarily mean they’re price gouging or doing anything illegal, Call 6 Investigates has learned.

Alison Mendenhall filed a complaint with the Indiana Attorney General’s Office after she checked her receipt and learned she bought a small 2 ounce hand sanitizer for $6.99 at the VP 51 gas station on Franklin Road.

A similar size bottle of hand sanitizer typically sells for $1 or $2.

"We're all trying to do the best we can and the last thing we want to worry about places like that hiking the price up,” Mendenhall said. “It’s just not appropriate to me, so that’s why I made the complaint.”

Gary Singh, manager at the VP 51 gas station told Call 6 Investigates their wholesaler sold them the small bottles of hand sanitizer for $5/bottle.

“We typically have a 30% profit margin,” Singh said. “So if we sell it for a higher price, we got it from the wholesaler at a higher price.”

VP 51 provided documentation showing the gas station purchased the hand sanitizer from its wholesaler SE Imports & Wholesale in Indianapolis at $5 per each 2 ounce bottle.

SE Imports & Wholesale provided the following statement to RTV6 indicating they’re paying more as well:

Our supplier charged us much more about a month ago than they usually did. One of the suppliers, Select Corporation charged us multiple times more than what they usually charged due to low supply and “air freight” rather than the usual container shipping methods that is usually used.
Even now, as more suppliers are manufacturing and making sanitizer our cost is over $2.00 per bottle for 1.75oz to 2oz. We have checked with 4-5 suppliers and all of their price to us is around that mark. We sell them to stores for a cheaper price now due to this lower cost and we have more product available at our disposable. Stores should all be paying under $3 per bottle now for 1.75oz to 2oz depending on the size, style, and brand of sanitizer.
Even these prices that we are purchasing for right now are much higher than what a traditional 2oz bottle used to cost us.
If you have any good sources or manufacturers that you guys know that can supply it for the old pricing structures and that can provide good quantity. I would be more than happy to reach out and use those sources and get these prices even more down. We love to support local business as well, if there is any company locally making sanitizers.

The Attorney General’s office is still investigating most of the price gouging complaints, and no cease and desist letters have been issued, nor has the state filed any actions in court related to COVID-19 and price gouging.

“There is no set formula in Indiana to determine if a higher-than-expected or high-than-normal price charged by a seller for a product during a time of crisis can clearly be considered price gouging,” Betsy DeNardi, director of consumer protection at the Indiana Attorney General’s Office, said. “Additionally, there is no set percentage increase in Indiana that would create a presumption of price gouging when looking at household items or other necessities.”

DeNardi said fundamentally, price gouging occurs when sellers raise prices to unfair levels.

“While specific price-gouging authority in Indiana law refers to fuel prices during a state of emergency, the office has the authority to enforce the Deceptive Consumer Sales Act, which permits appropriate enforcement of any unfair, abusive, deceptive or unconscionable conduct,” DeNardi said. “In order for the office to investigate and determine whether there is price gouging, we attempt to obtain information in order to determine whether market pressures, such as supply chain issues or increases in cost at distribution, have caused the increase or if it was a decision to increase prices to increase profit.”

The Attorney General’s Office encourages consumers who believe they have been subjected to excessive prices for consumer goods during this ongoing public health emergency to file complaints with the Consumer Protection Division.

“Pictures of the prices and product, as well as copies of receipts, are very beneficial in expediting the complaint through the review process,” DeNardi said.

RTV6 reached out to Marathon Petroleum and received the following response:

"Marathon locations are all independently owned and operated, and we have branding and supply agreements with their suppliers. We therefore cannot comment on behalf of the owner."

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