Group representing Coke, Clorox, other brands urges Attorney General Barr to fight coronavirus price gouging

Key Points
  • Lobbying group the Consumer Brands Association wants the Department of Justice to stop retailers from jacking up prices hand sanitizer, masks and other coronavirus essentials. 
  • The DOJ established a department to monitor those taking advantage of disasters, including price gauging, after Hurricane Katrina
  • Consumer Brands is urging national coordination to stop price gouging. 
William Barr, U.S. attorney general, listens during a roundtable discussion with law enforcement in Wichita, Kansas, U.S., on Wednesday, Oct. 2, 2019.
Nick Oxford | Bloomberg | Getty Images

A lobbying group representing some of America's largest consumer brands wants the Justice Department to stop retailers from jacking up prices on hand sanitizer, masks and other coronavirus essentials. 

The Consumer Brands Association – which represents brands and companies including Colgate-Palmolive, Coca-Cola, General Mills and Clorox – wrote a letter to Attorney General William Barr on Monday urging him to take action on sellers taking advantage of the coronavirus outbreak.

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The letter comes as Amazon, Walmart and other e-commerce companies have struggled to curb third-party sellers who are overcharging for products that have spiked in demand amid the spread of the coronavirus. 

"If price gouging continues over the coming months, more and more Americans will become unwilling and/or unable to pay excessive prices for these products," writes Bryan Zumwalt, executive vice president of public affairs for the Consumer Brands Association. 

"This will decrease the likelihood that individuals will take recommended and necessary preventative actions."

The Justice Department has had a department focused on fraud in the wake of disaster ever since the aftermath of Hurricane Katrina. The National Center for Disaster Fraud, which sits in the DOJ's criminal division, is focused on finding and prosecuting those who take advantage of disasters by manipulation, including price gouging.  

"It is vital that DOJ notify the public that it will work with its state and local law enforcement partners to prosecute sellers who engage in this illegal activity," Zumwalt said. 

The letter comes amid increasing scrutiny from lawmakers and regulators of retailers looking to take advantage of those panicked and preparing for potential quarantines and the further spread of the coronavirus. 

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The Food and Drug Administration has said it is monitoring the market for any products that make fraudulent coronavirus prevention and treatment claims. The agency said it would issue "warning letters, seizures or injunctions against products on the market that are not in compliance with the law."

State attorneys general, including those in Pennsylvania and Texas, have announced price-gouging protections. New York Mayor Bill de Blasio and New York Gov. Andrew Cuomo said on Sunday that authorities have fined retailer Scheman & Grant Hardware for jacking up prices of disinfecting sprays, wipes and hand sanitizer.

But Zumwalt of the CBA urged national coordination. 

"Given the rapid pace with which COVID-19 is spreading and the nationwide prevalence of price gouging, it is vital that the federal government play a role in these efforts," he wrote.

"Accordingly, we urge DOJ to coordinate with state attorneys general to ensure a swift, effective and unified national response to price gouging," Zumwalt wrote. 

Amazon said Friday that it has removed hundreds of thousands of "high-priced offers" and suspended thousands of sellers who have engaged in price gouging on its marketplace.

— CNBC's Annie Palmer contributed to this report.

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