The National Grocers Association is urging Congress to look into the findings of a new report from the Federal Trade Commission claiming that supermarkets profited from the pandemic and supply chain woes.
The trade group, which represents independent grocers, is calling for hearings in the Senate Subcommittee on Competition Policy, Antitrust and Consumer Rights and in the House Subcommittee on the Administrative State, Regulatory Reform, and Antitrust.
In a letter to the subcommittees’ chairs and ranking members, the NGA said that the FTC’s report supports the trade group’s claims that there are discriminatory practices in the grocery sector that have hurt small grocers, leading to higher prices and fewer choices for consumers.
“Notably, the [FTC] 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,” NGA Chief Government Relations Officer and Counsel Chris Jones wrote.
Jones said that “unprecedented buyer power” has allowed large retailers to get discounts and delivery terms from suppliers that “would not prevail in a competitive marketplace, pushing suppliers beyond what they would otherwise concede.”
While the NGA acknowledged that greater scale can allow retailers to improve efficiencies that result in savings for consumers, many independent retailers using cooperatives to achieve scale equivalent to large retailers aren’t getting the same supplier discounts that are offered to big grocers.
The NGA’s claims are similar to those made by the FTC in its report, which the agency issued Thursday. In the report, the FTC suggested that the grocery industry took advantage of inflation to boost profits at the expense of consumers: “Some firms seem to have used rising costs as an opportunity to further hike prices to increase their profits, and profits remain elevated even as supply chain pressures have eased.”
The agency also said that large food retailers’ efforts to guard their market power against supply chain disruptions brought on by the COVID-19 pandemic put smaller retailers at a competitive disadvantage.
The NGA wants Congress to investigate the findings, assess the adequacy of current antitrust laws and consider legislation to “foster a fairer marketplace on the U.S. supermarket sector,” Jones said.
