by Greg Ferrara / NGA president and CEO
As an industry, it is essential that we speak with a united voice to ensure that our interests are addressed and we are given a fair shake in the marketplace alongside our competitors.
It’s no secret that the market has been under more intense pressure in the past year and a half, as retailers and their supply chain partners have stepped up to the challenges of providing food and other essential goods to their communities while working on the front lines of the COVID-19 pandemic.
With the light at the end of the tunnel becoming clouded by the rising Delta variant, our industry is bracing for additional hurdles.
To be sure, a persistent inequity since March 2020 has become more apparent to independent community grocers and their wholesalers. Power buyers have ramped up anti-competitive tactics, exercising their dominance in the marketplace.
These dominant food retailers use their buying power to take greater control of the market, demanding special treatment from suppliers without economic justification. For decades, these discriminatory tactics have taken a toll on the marketplace and independent grocers have suffered.
It doesn’t just impact retailers and wholesalers – it impacts their customers, too. Independents were unable to secure many of the must-have products and faced supplier prices up to 53 percent higher than their larger competitors. That meant consumers were forced to either pay higher prices or travel farther to obtain the goods they need.
A food retail marketplace controlled by a handful of firms flies in the face of America’s free market principles. It discourages entrepreneurship, limits investment in underserved communities and harms consumers who rely on a vibrant and robust supply chain.
That’s why it’s time for Congress and the federal government to reassert the principles of antitrust law so that it can restore competition to an industry on which every single American relies.
Independent grocers have watched over the years as dominant chains ignore antitrust laws and abuse their buying power to demand suppliers provide lower prices and more favorable supply terms, special package offerings and product availability, leaving independent grocers to pay the price.
NGA published a white paper outlining why these tactics are unfair, how they’ve negatively impacted consumers and how Congress can resolve these issues.
Fortunately for independent community retailers and their consumers, antitrust reform and enforcement gained momentum when the Biden administration recently announced an Antitrust Executive Order that aims to promote competition in the American economy.
This order marked the first time in more than 20 years that the executive branch has acted to enforce the Robinson-Patman Act, a law that protects consumers and entrepreneurs from dominant grocery chains.
This summer, NGA SVP of Government Relations and Counsel Chris Jones testified before the Federal Trade Commission and attended a White House briefing, calling for enforcement of Robinson-Patman to address anticompetitive buyer power.
In addition, Associated Wholesale Grocers President and CEO David Smith testified before the Senate Judiciary Committee on antitrust reform and enforcement, noting that due to power buyers, “Everyday Americans who rely on community grocers have not been able to access the products they need to feed their families as the largest retailers demand priority access to high-demand products.”
NGA is seeking congressional hearings to shine a light on anticompetitive practices in the grocery sector; congressional oversight to hold antitrust enforcers accountable if they continue to fail to take steps to check retail buyer power and its harmful effects; and legislation, if necessary, to restore the original purposes of the antitrust laws.
From the four corners of the grocery store to the four corners of the country, this is just one area in which NGA aggressively advocates for independent community grocers.
