NGA Urges Congressional Hearings, Reform

Following FTC’s recent report that found that national grocery chains exploited supply chain disruptions caused by the pandemic to solidify their market control, the National Grocers Association wrote a letter to Congressional leaders urging action.

The letter, addressed to Sens. Amy Klobuchar and Mike Lee of the Senate Subcommittee on Competition Policy, Antitrust, and Consumer Rights, and Reps. Thomas Massie and Lou Correa of the House Subcommittee on the Administrative State, Regulatory Reform, and Antitrust, calls for hearings in the short term, followed 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. 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,” wrote Chris Jones, NGA chief government relations officer and counsel, in the letter.

The report found that major chains penalized suppliers that didn’t deliver on time during the pandemic, ensuring that their own stores would be stocked at the expense of smaller competitors.

“To gain access to scarce products and therefore a competitive advantage, some companies—most often larger ones—used policies that imposed strict delivery requirements on their upstream suppliers and threatened fines for noncompliance,” according to the FTC report. “Walmart even tightened the delivery requirements its suppliers had to meet to avoid fines as the pandemic went on.”