Chinese firm sells masks to US at 4 times the price seeking profits even amid coronavirus pandemic
Amid the outbreak of the global coronavirus pandemic, business instincts have refused to let go of the profit opportunities. A Chinese company is reportedly charging American medical suppliers over four times the price for medical masks even as hospitals in the US plead with citizens to donate equipment.
Countries around the world have found themselves in a heated race to procure masks that have become a hot pick as a defense against the outbreak that has killed almost 100,000 people.
An exclusive report talks about a Chinese firm in Hangzhou — Wehere Medical — that charged suppliers $744 for a pack of 200 medical-grade masks. The Daily Mail came up with the report after getting hold of a sales document dated March 13.
Medical distributors in Los Angeles told the Mail that the masks normally cost just $164 which means their prices were hiked by over 350 percent in times of high demand. Also, it was said that the Chinese company was now selling packs of 200 masks instead of the usual 20.
Both the US and China have been accused of hijacking masks from other parts of the world to meet their surging domestic demand.
While Chinese firms based in countries like Australia were accused of hoarding medical equipment and sending it back to their home country when the pandemic looked to soar, America has been accused by its European allies like Germany and France of snatching masks that were meant for shipment to their shores.
US federal system under pressure over shortage
In the US, the federal system has come under pressure as states have complained that the federal government was not helping them with enough medical equipment even as demands skyrocketed.
The shortage of protective equipment for medical workers has been so serious that some hospitals are even accepting donated masks, gowns and other equipment from locals.
The document obtained from the Chinese medical firm showed a list of quotes for four types of masks, including an N95 respirator which is used in American hospitals; FFP2 and FFP3 respirators used in Europe and a "medical non-woven mask, 99% filtration rate" which is used by surgeons to stop coughing on patients.
The FFP3 — the highest grade mask — is listed at $3.72 per mask with a minimum order of 200. A LA-based distributor said on the condition of anonymity that he pays just 82 cents for a mask.
When the Mail contacted Wehere for its steep hike in the prices, it said it was because of the 10-time rise in the cost of raw materials as well as skyrocketing labor costs.
In the US, authorities have warned against sellers who choose to make profits by raising prices in times of an emergency. In early March, California Attorney General Xavier Bercerra warned sellers who flouted the law that bars raising prices by more than 10 percent at the time of a crisis.
"These price-gouging restrictions make it illegal for businesses to raise the prices of most goods and services by more than 10%," Bercerra said. "Those goods and services include but are not limited to emergency supplies, medicine and medical supplies, food and drink."
Bercerra said the breaching of price-gouging laws can be punished with up to one year in prison and/or a fine up to $10,000.
In Los Angeles, Attorney Mike Feuer told Mail that his office has had over 200 reports of price gouging last week.