Formula Price Gouging

Recently Georgia Attorney General Carr warned consumers of potential price gouging of baby formula and related scams. He notes price gouging protections are in effect there until at least June 14, 2022 due to a state of emergency caused by supply chain disruptions. Attorney General Carr also noted problems with inflation and gas prices.

Later in the week these concerns were echoed in a House Judiciary Committee meeting addressing in part “Combatting Corporate Profiteering.” State representatives raised concerns on prices in these same industries of oil and formula, for instance. We have already also seen states inquire about gas prices. So, Georgia likely is not the only state scrutinizing prices as we encounter continued supply chain issues and inflation.

Retailers and businesses across the supply chain should continue to monitor price gouging laws and state emergency declarations for compliance. Though more direct Covid-related price gouging enforcement has faded, emergencies related to Covid or other emergencies could continue or revive price gouging restrictions. And it’s important to remember that price gouging laws are varied in the states, with many leaving undefined exactly what type of price increase is permissible and instead using undefined standards like “excessive.” Unlike other emergencies in the past, the current state of supply chain and labor shortages along with skyrocketing costs for businesses make it unrealistic for companies to simply put a freeze on any price increases – so states may be testing some of these undefined concepts soon.

States will be carefully looking at pricing as consumers and constituents become more sensitive to the latest changes. Price gouging enforcement is an avenue states may be able to use to appease the public in this economy. But with this increased scrutiny by states it is extremely important to have a complete understanding of what is permissible in each state a business operates in, all while being sensitive to the varied complexities of different state laws.

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