US grocers urge regulators to act on buyer power in food retail

Core Viewpoint - The National Grocers Association (NGA) has urged the US Federal Trade Commission (FTC) and Department of Justice (DOJ) to enhance enforcement of antitrust laws to combat harmful buyer power abuses in the grocery retail sector [1][2]. Group 1: Buyer Power Concerns - The NGA's letter warns that dominant market players may exploit their purchasing leverage, harming competition and raising costs for rivals, which ultimately leads to higher food prices for consumers and independent grocers [2][5]. - The association calls for the application of established antitrust provisions, such as the Robinson-Patman Act, to address discriminatory pricing practices and preferential treatment by large grocery buyers [3][4]. Group 2: Impact on Competition - Lax enforcement of antitrust laws has allowed dominant retailers to secure preferential pricing and terms that are inaccessible to smaller competitors, distorting normal pricing dynamics [4]. - The NGA argues that such buyer power practices directly impact the competitiveness of independent grocers, narrowing the market for smaller chain and family-owned stores [5]. Group 3: Effects on Food Prices and Supply Chain - The NGA asserts that unchecked buyer power contributes to higher consumer prices and reduced food access, particularly in smaller and rural communities [6]. - Research highlighted by the NGA indicates that markets with higher retail concentration experience faster price growth and stronger inflation pass-through, suggesting that reduced competition elevates long-term grocery costs [6]. - Excessive buyer power can negatively affect producers and farmers by suppressing upstream prices while increasing costs downstream, impacting the broader food supply chain [7].