August 4, 2021

Corona self-tests: junk goods, clean past the market

Corona self-tests have degenerated into junk goods in Germany. Almost every day, drugstores, discounters and supermarkets undercut each other with new competitive prices for test kits for home use. The latest offensive comes from Rossmann: The drugstore chain has recently announced a week of action and is charging just 68 cents per test from Monday to Friday. In a pack of five, the price drops to just 63 cents each.

Some of the competition’s offers are also well below one euro. At the drugstore chain dm, for example, a single rapid antigen test currently costs 80 cents, in a multipack it is 75 cents each.

At discounter Lidl, on the other hand, the range is between 68 and 80 cents: The cheapest price is for a pack of thousands, which is intended to appeal to large consumers such as companies, while the 80 cents are due for individual items. Meanwhile, Aldi Nord does not differentiate according to quantity: the discounter requires a uniform 95 cents per item, regardless of the size of the pack.

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The market was completely overturned within a few weeks. After all, the tests were still available in the spring for around five euros – each. “In March, self-tests were a scarce commodity, and the purchase prices for retailers and thus also the sales prices were correspondingly high,” explains Sebastian Bayer, the managing director for Marketing and Procurement at dm. Now the picture has changed. “The purchase prices have fallen, which is why we want to pass this advantage on to our customers.”

The reason for this is the significantly larger range. Dozens of manufacturers entered the market within a very short time and have applied for special approvals from the responsible Federal Institute for Drugs and Medical Devices (BfArM). At the end of February, the authority initially only allowed three manufacturers to temporarily sell their test kits in Germany. Back then, people were queuing in front of the supermarkets and the sales volume per customer was limited.

In the meantime, however, 73 companies already have such a special license. The pharmaceutical industry does not want to speak of an oversupply, but rather of a market economy. “After the self-tests were still very scarce in the first quarter of 2021, we believe the situation has now relaxed and self-tests are widely available”, explains Gabriele Köhne from the Association of the Diagnostics Industry. “According to the laws of the market economy, this leads to falling prices.”

Demand plummeted

The federal government is also likely to have provided for the bulging shelves in the retail trade – with incentives through subsidies for companies. Until March 31 of this year, manufacturers of rapid antigen tests, including self-tests for laypersons, were able to apply for government grants for new systems. The aim of the program is to make the tests less dependent on imports, especially from the Far East. Anyone who undertakes to sell their tests exclusively in Germany and the EU by the end of 2022 will receive up to 30 percent of their investments reimbursed. The federal government pays a maximum of 30 million euros per company.

After all, seven applications were received by the responsible Federal Office for Economics and Export Control, or BAFA for short. They are currently still being examined, the authority explains when asked. Only then will the funds be paid out. The authority can therefore not yet say how high the amount of the funding will be.

But there are not only major changes on the supply side. Demand has also plummeted. The goods are lying “like lead” on the shelves, can be heard in retail outlets in some places. Probably also because there are now nationwide test centers with free offers for every German citizen – and because the self-tests do not even apply to many leisure activities.

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Mutants

In some cases, tests are no longer required due to the low incidences. “The response and demand from our customers was extremely high, especially in the first days and weeks of the offer. With the expansion of the test capacities in the test centers and the increasing vaccination rate, the demand has decreased as expected, “commented a spokesman for Aldi Nord.

The discounter was one of the first large retail companies to offer lay tests and sell millions of them. “This enabled us to make a further contribution to containing the pandemic.” And it should stay that way despite the drop in prices. “Self-tests offer a particularly flexible and easy way of being able to test yourself spontaneously at home and thus gain additional security for your own family, for example. In this respect, we would like to continue to offer our customers this convenient and easy way of testing. “

Shelves full for a long time

Neither Aldi nor any other dealer will reveal how economical this offer is on request. However, there has long been speculation in the industry about losing deals and high write-offs. However, the sudden sell-off should not be due to a lack of durability of the tests, as consumers in particular suspect. Similar to pharmaceuticals, the raw materials contained in the tests can only be safely used for a certain period of time, according to the Association of the Diagnostics Industry. “Many manufacturers give a shelf life of one and a half years,” explains spokeswoman Köhne. This means that the tests will continue to be suitable well into the coming year.

However, another time specification causes confusion: the date of the temporary approval according to the Medical Devices Act, which is prominently printed on the front of many packaging. The BfArM generally only grants special permits for rapid tests for three months; the end date is noted on the tests. For manufacturers who received their sales permit from mid-March, the time will soon run out.

In order to be able to sell the tests after the three-month period, manufacturers need regular certification. Many dealers and pharmacies are also likely to wonder what happens to their stocks. Can the test kits still be sold after the deadline has expired? Yes, at least that’s what the BfArM thinks. “The special approval and its time limit regulate the initial placing on the market, i.e. the first transfer by the manufacturer to a third party,” explains the authority. The resale of retail chains, for example, is not covered by this.

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This means that, in the opinion of the authorities, dealers could still place goods in stock on the shelves after the special license had expired. Nevertheless, retailers shouldn’t be too sure. Because: Market surveillance is a matter for the individual federal states. Whether dealers can continue to sell the tests even after the special permits have expired can therefore only be clarified with certainty by the state authorities.

The price war is therefore likely to continue in the coming weeks. In some places, the tests are now even free. At Discounter Netto, for example, customers can add a test to their shopping cart free of charge if they shop for a certain amount and present the Deutschland Card.

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