Emergency Price Controls

Although competition and demand drive prices in our free-market economy, during a declared state of emergency Georgia law prohibits businesses from taking advantage of the situation to engage in price gouging (O.C.G.A. Sections 10-1-393.4 and 10-1-438).

Under a state of emergency, state personnel and equipment may be used to help local governments, and the Governor may prohibit price increases on items that he considers to be “necessary” to preserve, protect, or sustain the life, health, or safety of persons or their property. The Governor must identify the specific goods and services to which the “price gouging” law applies.  These can include food, lodging, gasoline, propane gas, lumber and other supplies. Businesses may not sell any of the specified goods or services at prices higher than the prices at which those same goods or services were offered before the declaration of a state of emergency.   Nor may a business raise the price of supplies or services for the purpose of salvaging, repairing or rebuilding structures damaged as the result of a natural disaster.  Price increases on the products and services specified by the Governor are only permitted if they accurately reflect an increase in the cost of new stock or the cost to transport it, plus the retailer's average markup percentage applied during the ten days immediately prior to the declaration of a state of emergency.

The Governor is empowered to declare a state of emergency in response to or in anticipation of a natural disaster or a national security emergency.  All counties in the state are covered, unless the executive order declaring the emergency is limited geographically to certain counties.  The Governor’s Office of Consumer Protection has the authority to investigate allegations of illegal pricing, with the assistance of the Georgia Emergency Management Agency (GEMA) and the Georgia Bureau of Investigation.  Violators can be fined from $2,000 to $15,000 per violation.

It is the responsibility of each business to comply with the provisions of the price control statute when they are activated by an executive order.  Companies should monitor the situation when emergency conditions exist, checking the Governor’s web site under Executive Orders and/or the GEMA website for declaration of a state of emergency.