Independent food retailers call for antitrust enforcement over pressure to ‘inflate prices’

Trade group representing independent grocery stores He is calling on lawmakers and regulators to enforce existing antitrust laws, which he says would do more to improve competition and help consumers than pressure to allegedly “inflate prices.”

The National Grocers Association, which represents independent retailers that are privately owned by families or employees, as well as wholesalers in that segment, has called for the law to be used to address price competition in the industry. Chris Jones, NGA’s chief government relations officer and counsel, told FOX Business that supplier pricing is one of the biggest issues the group’s members face as they compete with larger rivals.

“You have a handful of really big, dominant companies in this country that have a lot of power in the marketplace,” he said. “Walmart is the biggest fish in the sea… they have close to 30% of sales in this country, over $300 billion in food sales in a $1 trillion market. That means for the supply chain, they have a lot of power over their suppliers.”

Jones explained that the influence in the supply chain of larger companies like Walmart helps them get better prices from suppliers. He added that proposed Albertsons-Kroger mergerthe subject of an ongoing antitrust investigation, showed that the two companies believe they need to join forces to more effectively compete with Walmart in the grocery industry.

HERE’S WHY GROCERY STORES ARE REALLY RAISING PRICES

“I think what’s fascinating about watching the arguments in Albertsons-Kroger is that it kind of confirms what we’ve been saying all along,” Jones explained. “They’re getting bigger because that’s the only way they can compete with Walmart. So what that really means is that they have to have the same power dynamic that Walmart has over their suppliers to squeeze out of them the prices and the deals that Walmart gets to compete with Walmart.”

Heart	Security	Last	Change	Change %
KR	KROGER Company	53.21	+0.71	+1.35%
ACI	ALBERTSON COMPANIES	19.62	-0.50	-2.49%
WMT	WALMART INC.	77.23	+0.81	+1.06%

“But what does that mean for everyone else in the market? It means there are two big buyers who are putting pressure on the supplier, and for us it just means we’re going to get even worse results in terms of price, availability, offers and promotions,” he added.

“That’s why we see this as a serious threat to our segment of the industry,” Jones said of the proposed merger. “I don’t think the problem should be solved by big merger. This should be addressed by enforcing laws that limit Walmart’s ability to use its coercive power. The Robinson-Patman Act comes to mind, which is intended to help level the playing field—as long as shoppers buy in equal or similar quantities, they should receive the same price.

GROCERY STORE CEO SETTING RECORD IN PRICE GOING ACCUSATION AGAINST HARRIS

The Robinson-Patman Act aims to prevent sellers from charging competing buyers different prices for the same goods or from discriminating against them by providing “bonuses” in the form of compensation for advertising and other services.

“This type of price discrimination can give privileged customers an advantage in the marketplace that has nothing to do with their higher efficiency,” he said. Federal Trade Commission (FTC) notes on its website regarding the law. “Price discrimination is generally lawful, especially if it reflects the different costs of dealing with different buyers or is the result of a seller trying to match a competitor’s offering.”

A report by the law firm Morgan Lewis noted that the Justice Department announced it would stop enforcing the Robinson-Patman Act in 1977 and that the FTC has not brought a case under the act since 2000 — although the act has been enforced through civil proceedings since then. However, the report noted that the FTC has expressed interest in reviving enforcement of the act in recent years.

HARRIS’ ECONOMIC PLAN PROPOSES DISRUPTING “UNDERPRICE” AND CHASE “EXCESS PROFITS,” BUT WHAT DOES THAT DEFINE?

Jones said that in response to allegations of food price gouging that have been made, including: Vice President Harris’ Economic Agenda“We don’t believe that’s happening. It’s a very specific term that probably polls well.” He added that policymakers and regulators should dial back their rhetoric and focus instead on enforcing aspects of antitrust law.

“What happens when a major political candidate comes out and accuses the food industry of deceiving consumers is, in a way, confirming someone’s pre-existing views,” he said. “The intention, we were told, was to focus on the big players. While that is the intention, most negative consumer reaction is borne by our members because our costs and retail prices are higher.”

GET FOX BUSINESS ON THE GO BY CLICKING HERE

“It really had a negative impact on how consumers perceive us, and it really upset our members who, because of this margin compression, are really doing everything they can to serve their communities,” Jones explained. “So we think the issue is price competition and price discrimination, not price gouging.”