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FTC claims larger grocers used pandemic to increase profits

FTC claims larger grocers used pandemic to increase profits

The Federal Trade Commission released a report last week accusing large grocers like Walmart, Amazon and Kroger of using pandemic-era supply chain disruptions “as an opportunity to further raise prices and increase their profits, which remain elevated today.”

The report also claims that consumers were hit with skyrocketing prices for groceries and shortages on products like toilet paper.

FTC Chair Lina M. Khan said in a statement that “The FTC’s report examining U.S. grocery chains finds that dominant firms used this moment to come out ahead at the expense of their competitors and the communities they serve.”

The FTC said its investigation focused on nine major retailers, including Walmart, Amazon, Kroger, C&S Wholesale Grocers, Associated Wholesale Grocers, McLane Co., Proctor & Gamble, Tyson Foods, and Kraft Heinz.

The National Grocers Association (NGA) reacted to the report by saying that the study “confirms what independent grocers and their customers experience firsthand: dominant national chains or co-called ‘power buyers’ are abusing their immense economic power to the detriment of competition and American consumers.”

According to NGA President and CEO Greg Ferrara, “decades of lax antitrust enforcement enable grocery power buyers to coercively squeeze suppliers to comply with their trade demands, unfairly disadvantaging smaller competitors.”

The FTC report, released shortly after its antitrust lawsuit to block the $24.6 billion Kroger-Albertsons merger, said smaller grocers were disproportionately impacted by supply chain issues compared to larger companies.