NGA Urges Congress to Hold Hearings on FTC Report
In the wake of the Federal Trade Commission (FTC) report finding that major grocery chains used supply chain disruptions caused by the COVID-19 pandemic to strengthen their control over the market, worsening shortages for consumers and inflating grocery prices, the National Grocers Association (NGA) has urged federal legislators to seek solutions to level the playing field.
In a letter addressed to Sens. Amy Klobuchar, D-Minn., and Mike Lee, R-Utah, of the Senate Subcommittee on Competition Policy, Antitrust and Consumer Rights, and Reps. Thomas Massie, R-Ky., and Lou Correa, D-Calif, of the House Subcommittee on the Administrative State, Regulatory Reform and Antitrust, the trade organization representing the independent grocery sector called for hearings in the short term, subsequently backed up by meaningful legislative reform.
“The report supports the National Grocers Association’s longstanding assertion that consolidation and buyer power in the grocery sector lead to discriminatory practices against independent grocers, resulting in elevated prices and diminished choices for consumers,” wrote Chris Jones, chief government relations officer and counsel at Washington, D.C.-based NGA, in the letter. “Notably, the report reveals how major national grocers capitalized on supply chain disruptions during the pandemic to solidify their market dominance to the detriment of competition and consumer welfare. These findings necessitate further investigation and consideration of legislative remedies to foster a fairer marketplace in the U.S. supermarket sector.”
One report finding singled out by NGA was how big chains penalized suppliers that didn’t deliver in a timely fashion during the pandemic by threatening fines, ensuring that their own stores would be stocked while the smaller competitors’ shelves were empty.
When the report was issued last week, NGA President and CEO Greg Ferrera noted: “This study confirms what independent grocers and their customers experience firsthand: dominant national chains or so-called ‘power buyers’ are abusing their immense economic power to the detriment of competition and American consumers. In communities nationwide, independent grocers strive to compete on price, quality, service, convenience and product range. However, decades of lax antitrust enforcement enable grocery power buyers to coercively squeeze suppliers to comply with their trade demands, unfairly disadvantaging smaller competitors. The result – confirmed by the FTC’s study – is a less efficient consumer supply chain where buyer power dictates priority distribution of high-demand products and special pricing arrangements.”
