Pleasanton-based Safeway has agreed to pay more than $140,000 to settle a complaint that it violated Gov. Newsom’s executive order against charging “unconscionably excessive” prices during the COVID-19 pandemic.
The complaint was brought by the Alameda County and Contra Costa County district attorney offices, which will each receive $38,000 for future consumer-protection efforts, along with another $2,500 each to recover the cost of the Safeway investigation.
The remaining $61,000 will be paid into a trust fund managed by the state for consumer protection investigations.
Safeway, which operates more than 500 grocery stores in California, did not admit any wrongdoing in the settlement.
The executive order, issued on April 3, prohibited retailers from marking up the price of any products introduced after Feb. 4 by more than 50%.
The complaint focused on two products that Safeway introduced at the start of the pandemic when some products became hard to find -- Raff Distillerie Hand Sanitizer and Ocean Fresh Pump Gel Hand Sanitizer.
According to the complaint, Safeway paid $3.68 per unit for Raff Distillerie, which it then sold for $5.99, or 47 cents more than the allowable mark-up. The store paid $5.99 per unit for Ocean Fresh, which it then sold for $9.99, or $1.01 more than allowed. Safeway sold more than 22,000 bottle of Raff Distillerie and 65,000 bottles of Ocean Fresh at those prices.
Contra Costa District Attorney Diana Becton, whose office received the original consumer complaint, said the joint investigation with Alameda County did not find any other pricing violations at Safeway. She added that Safeway immediately lowered the cost of the hand sanitizers when the issue was brought to the company’s attention.
However, she noted that Safeway was selling the sanitizers at inflated prices at the same time public health officials were urging people to use them to help prevent the spread of COVID-19.
“The violations at issue here are serious by their very nature,” Becton said. “Little can be more serious than a violation of a governor’s emergency order during a state of emergency. The ongoing pandemic has affected the lives and personal hygiene practices of millions of people in California.”
As part of the settlement, Safeway also agreed to implement a process within 30 days to ensure that all price increases in its California stores comply with government mandates during a state of emergency.