CONCORD (CBS SF) – District attorneys in Alameda and Contra Costa counties announced a $140,000 settlement with Safeway in a price gouging lawsuit involving hand sanitizer sold during the early days of the COVID-19 pandemic.
Prosecutors said Tuesday that the lawsuit was prompted by a customer at a Safeway store in Concord who called the Contra Costa DA’s Consumer Fraud Hotline and complained about the prices of two brands of hand sanitizer back in May.
A joint investigation by both district attorneys offices revealed the grocery chain marked up both items more than 50% over the wholesale cost, after Gov. Gavin Newsom signed an executive order in April that prohibited price gouging on “critical items” during the pandemic state of emergency.
Under Newsom’s executive order (.pdf), sellers of food, consumer goods and medical or emergency supplies cannot increase prices by more than 10%. Exceptions apply if the increase is directly related to higher costs imposed on the seller by suppliers.
“This crisis has impacted every Californian and our normal way of life, and we are ensuring that all consumers are able to purchase what they need, at a fair price,” Newsom said at the time.
Alameda County DA Nancy O’Malley said Tuesday, “During this unprecedented crisis, my office continues to remain vigilant in ensuring that Californians are able to purchase consumer goods, particularly health-related items such as hand sanitizer, at prices that do not exceed the amount allowed by law.”
Contra Costa County District Attorney Diana Becton said, “Public health officials were advising constant hand-washing to prevent the spread of the virus. If soap and water was not available, hand sanitizer was recommended as the next best thing. These are the items that Safeway sold or offered for sale at ‘unconscionably excessive’ prices.”
Safeway cooperated fully with the investigation, O’Malley said, and took “immediate” steps to correct the pricing issues.
Without admitting liability, Safeway was ordered to pay about $81,000 in civil penalties and costs and $62,000 in restitution in the judgment. The grocery chain is also required to ensure prices comply with California law, including any emergency orders issued by the Governor.
Newsom’s executive order on price gouging remains in place through at least March 4, 2021, according to the California Attorney General’s Office.