Should the Feds move in to help indie grocers?
Independent grocers and smaller chains have long complained about the uneven playing field where all they get are scraps left behind by big retailers who call the shots with consumer packaged goods vendors when it comes to product supplies, pricing and promotions. Now, they want the government to turn its attention to enforcing existing laws and clean up a long time mess that threatens their very existence.
The National Grocers Association (NGA), which represents more than 1,600 independent grocers operating nearly 9,000 stores across the U.S., says that the outbreak of the novel coronavirus pandemic only widened disparities in how its members are treated compared to large regional and national chains.
Greg Ferrara, NGA CEO and president, said chains have used their influence throughout the pandemic to “demand special treatment from suppliers without an economic justification.”
As the chains grab an unfair share of available goods from suppliers, contends NGA, they leave independents with a poor selection of leftovers at much higher prices. “Congress has to stand up for local businesses and consumers to demand an end to these harmful tactics and restore a competitive marketplace that benefits the economy and grocery shoppers alike,” said Mr. Ferrara.
A white paper produced by the group asserts that its members have faced situations in which suppliers have refused to sell them the same products or package sizes offered at chain stores. NGA members continue to report being able to buy products more cheaply from a big box competitor than through brand suppliers.
NGA is proposing that federal agencies and lawmakers take specific actions, including investigations and hearing on anticompetitive practices in the grocery business. The group wants a particular focus on how current uneven treatment affects consumers and businesses operating in rural and urban areas.
Independent grocers are also looking for Congressional oversight committees to hold the federal agencies accountable for adhering to laws such as Robinson-Pattman that have long been on the books but rarely enforced in real world practice.
NGA has further recommended that the Federal Trade Commission, Department of Justice and state attorneys general should do their own investigations and tighten enforcement wherever it is found to be lax.
The trade group has also suggested that new antitrust laws may need to be put in place if existing ones can not be enforced according to their original intent.
- Pandemic Worsens Dominant Food Retailers’ Anti-Competitive Tactics Against Local, Independent Grocers – National Grocers Association
- Cleanup Needed in the Grocery Aisle – National Grocers Association
DISCUSSION QUESTIONS: Do you agree that independent grocers are operating in an anticompetitive marketplace? How would you resolve this dispute?