First, members of Congress asked federal regulators to investigate whether digital-only grocery discounts are discriminatory to some shoppers. Now, some of those same lawmakers are asking the same regulators to investigate whether a lack of competition is forcing all grocery shoppers to pay higher prices.
In a letter to the Federal Trade Commission, 14 members of the U.S. Congress are urging the agency to step up antitrust enforcement, to prevent big retailers and food suppliers from using their market power to squeeze smaller competitors and shoppers alike.
“Nearly every step of the food supply chain is highly concentrated, causing higher prices to consumers and harming farmers and small businesses,” the letter reads. Lead authors Elizabeth Warren, Democratic Senator from Massachusetts, and Mary Gay Scanlon, Democratic Representative from Pennsylvania, urged the agency to revive enforcement of the Robinson-Patman Act, which prevents “price discrimination (that) may give favored customers an edge in the market.”
That, the lawmakers argue, is exactly what’s currently happening in the grocery business.
“Currently, four food retailers account for over a third of national grocery sales,” the letter states. And “grocery suppliers are also highly concentrated.” This concentration allows large retailers to “extract more favorable prices and terms from suppliers,” which are then “forced to make up their losses by charging higher prices to independent, smaller grocery stores.”
And those costs are then passed on to us, the shoppers. Even the large retailers that are able to wield their size and influence to keep their own prices low as compared to their competitors can take advantage of shoppers, the lawmakers argue. They cite a recent FTC report that found “giant grocery chains took advantage of supply chain disruptions during the pandemic to hike up prices to increase their profits.”
The Robinson-Patman Act, the lawmakers argue, is made for situations like these. It’s been on the books for decades, they point out, and is just waiting to be enforced.
“RPA enforcement fell into disuse in the 1970s,” the letter goes on. “But the RPA is still the law of the land and can be a critical tool to promote fair competition in the food industry.”
The lawmakers express particular skepticism of the proposed Kroger-Albertsons merger, which the FTC itself is already challenging. Such a combination would merely “fuel the vicious cycle of concentration and price discrimination,” the letter argues, resulting in “a duopoly with Walmart,” in which the two retailers would dominate the grocery market in communities across the country, “increasing their ability to lower wages and unfairly exert pricing power.”
The letter is the latest example of Congressional legislators becoming more vocal about rising prices at the grocery store. Three of the lawmakers who signed this letter also signed onto an earlier letter to the FTC last fall, urging the agency to investigate “the harm that the lack of access to store-issued digital coupons is having on consumers, particularly senior citizens, low income-individuals, and those without internet access or digital devices.” And three other signers of this latest letter also recently cosponsored a bill to outlaw “shrinkflation,” otherwise known as “the practice of companies reducing product size while maintaining the same retail price.”
As for regulating retailers, “unfair competitive practices and high concentration in the food industry harms small businesses, workers, and consumers,” the newest letter reads. “By limiting competition, the largest firms can raise the price of food and lower workers’ wages.”
It’s already happening, they warn, and the FTC already has the tools to stop it. Whether it’s price discrimination, shrinkflation, or digital coupon discrimination, saving money on your groceries isn’t easy these days. But now, a growing number of lawmakers hope regulators will step in to help make it just a little easier.
Image source: osseous 
