Dive Brief:

• The Food Marketing Institute has called for lower taxes on grocery stores, according to a press release. Currently, the industry pays $153 billion in taxes each year, or $32,000 for each employee.
• Slim profit margins make it difficult for retailers to stay profitable under current tax rates, FMI noted. The group also notes that supermarkets produced more than $363 billion last year.
• “Simply put, all Americans — from employees and their families to customers — rely on the industry’s success,” FMI President and CEO Leslie G. Sarasin said in the release. “Our industry needs tax relief to continue setting the table for economic growth.”

Dive Insight:

Last month, industry groups like FMI and the Grocery Manufacturers Association cheered the tax reform framework proposed by the “Big Six” group of Republican congressional leaders and administration officials. The proposal, which includes lowering the corporate tax rate from 35% to 20% and creating a maximum pass-through business income tax rate of 25%, would create a more “level playing field” for retailers, according to FMI.

Now, as officials begin working through the details of tax reform, FMI and other trade groups want to make sure the food industry’s interests are considered.

“As Congress begins working to overhaul the tax code, it’s crucial any proposals to pay for the lower rates do not fall solely on the back of the businesses lawmakers are attempting to support,” Greg Ferrara, the National Grocers Association’s senior vice president of government relations and public affairs, noted in a recent statement.

The Food Marketing Institute no doubt sees an industry ally in the Trump administration, which has expressed a distaste for industry regulations. Delayed implementation of menu labeling and the new Nutrition Facts label underscore this approach, with industry groups cheering the moves while consumer advocacy groups like Center for Science in the Public Interest say they’re prioritizing industry needs over consumers.

Grocers’ slim margins are under increasing pressure these days from pricing and promotional activity stemming from the most intense competition the industry has ever seen. For many retailers, its another profit-slashing expenditure — and one that’s unnecessarily high, according to them.