Federal Trade Commission Opens Investigation Over US Food Prices Are Too High
The Federal Trade Commission (FTC) said it is investigating the causes of the ongoing supply chain disruptions and how they "create serious and ongoing hardship for consumers and hurt competition in the US economy." Writes about it Yahoo!.
The FTC said it told Walmart, Amazon, Kroger and other major wholesalers and suppliers, including Procter & Gamble Co., Tyson Foods and Kraft Heinz Co., to “pass on information to help investigate the reasons for empty shelves and sky-high prices.”
Similar inquiries are also sent to C&S Wholesale Grocers, Inc., Associated Wholesale Grocers, Inc. and McLane Co, Inc.
“Supply chain disruptions result in disruptions to the supply and delivery of a wide range of goods, from computer chips and drugs to meat and lumber,” said Federal Trade Commission Chair Lina Khan.
The FTC said companies will have 45 days from the date they receive the request for a response.
Along with understanding the causes of supply chain disruptions, the FTC study will examine "whether supply chain disruptions lead to scarcity, anti-competitive practices, and drive consumer prices up."
The FTC said that companies must “detail the main factors preventing them from receiving, transporting and distributing their products; the impact of these disruptions in the form of pending and canceled orders, increased costs and prices; most affected products, suppliers and resources; and the steps companies are taking to resolve disruptions; and how they distribute goods to their stores when they are in short supply. "
Companies are also required to provide the FTC with “internal supply chain disruption documents, including supply chain strategies; pricing; marketing and promotions; costs, profit margins and sales ”.
The National Grocers Association (NGA), which represents the independent supermarket industry, said it is pleased that the FTC is moving forward with its research.
“This study is the first key step in driving competition in the food supply chain,” said Chris Jones, senior vice president of the NGA. "It will shed light on what our members already know: dominant stores are using their size to demand better deals, better prices, and better products from suppliers, leaving their competitors and American consumers with no choice."
Jones said the action "prevents independent grocers from purchasing key products that their customers need and forces small independent grocers and their customers to bear the disproportionately heavy burden of food price spikes during supply chain disruptions."
Holiday shopping and supply chain
Ahead of the holidays, US President Joe Biden tried to convince shoppers that his administration was working to fix supply chain problems.
Businesses are working to cope with the lingering effects of the quarantine and the challenges posed by the strong recovery, which has generated more demand than many ports, manufacturers and retailers can handle.
The president spoke with executives from Best Buy, Food Lion, Samsung, Etsy and Walmart. Biden was reassured by corporate executives.
“While we are all concerned about the supply chain, we have more inventory than a year ago and we have the inventory we need to support the business,” said Walmart CEO Doug McMillon. - And we see progress. Port and transit delays are reduced. "
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