Harris plan to lower grocery costs receives pushback
Sarasin
| Vice President Kamala Harris, the Democratic nominee for president, is scheduled to give a speech at 2:45 p.m. today on her economy policy that includes lowering grocery store costs by establishing “the first-ever federal ban on price gouging on food and groceries,” setting “clear rules” for corporations and giving the Federal Trade Commission and state attorneys general the authority “investigate and impose strict new penalties on companies that break the rules.” But Harris’ proposals have already garnered pushback from both the food industry and economists. Former President Trump has blamed the Biden-Harris administration for higher food prices. In a preview of her speech, the Harris-Walz campaign said, “Vice President Harris and Gov. [Tim] Walz will work to enact a plan in their first 100 days to go after bad actors to bring down Americans’ grocery costs and keep inflation in check. They will work with Congress to: ▪ “Advance the first-ever federal ban on price gouging on food and groceries; ▪ “Set clear rules of the road to make clear that big corporations can’t unfairly exploit consumers to run up excessive profits on food and groceries. ▪ “Secure new authority for the FTC and state attorneys general to investigate and impose strict new penalties on companies that break the rules.” The campaign document added, “Extreme consolidation in the food industry has led to higher prices that account for a large part of higher grocery bills.” “To confront this issue, Vice President Harris will also direct her administration to crack down on unfair mergers and acquisitions that give big food corporations the power to jack up food and grocery prices and undermine the competition that allows all businesses to thrive while keeping prices low for consumers. “And her plan will support smaller businesses, like grocery stores, meat processors, farmers, and ranchers, so those industries can become more competitive.” The Harris-Walz campaign document said, “These actions stand in stark contrast to [Republican candidate Donald] Trump, who would increase costs for families by at least $3,900 with what is, in effect, a new national sales tax on imported everyday goods that American families rely on, like gas, food, clothing, and medicine.” “Sixteen Nobel laureates agree that Trump’s economic agenda would ignite inflation, and other experts predict that his plans would plunge the United States into a recession,” the campaign said. That statement was an apparent reference to Trump’s proposal to put a 10% tariff on all imported goods. On Thursday, National Chicken Council Interim President Gary Kushner said, “Americans are seeing inflation in nearly every part of their livelihoods — rent, gas, automobiles, furniture — not just in the meat case.” “Chicken prices are largely affected by supply and demand, by major input costs like corn, soybeans, energy, packaging, transportation, and by fiscal policy and burdensome government regulations. Not price gouging,” Kushner said. “It’s time for this administration to stop using the meat and poultry industry as a scapegoat and a distraction for the root causes of inflation and the significant challenges facing our economy.” |
| Leslie Sarasin, president and CEO of FMI —The Food Industry Association, said, “Inflation has caused the price of many consumer goods — from gasoline to apparel — to increase.” “But 2024 Consumer Price Index numbers reveal that the pace of year-over-year inflation continues to moderate, and food prices actually represent a bright spot in the data. In fact, yesterday’s July CPI placed year-over-year food-at-home inflation at 1.1%, which remains below the 2.9% increase in overall inflation,” Sarasin said. “Food retailers’ profit margins are, and always have been, extremely tight — just 1.6% last year. The entire food industry works tirelessly — amidst fierce competition — to address inflation and keep prices as low as possible to meet the needs of shoppers. “However, the food industry continues to face significant economic headwinds – including increases in labor costs, volatile energy prices, an uptick in climate change-related severe weather events, supply chain challenges, and an unprecedented level of regulatory burden — that increase the costs to produce food and get it to store shelves. “It is both inaccurate and irresponsible to conflate an illegal activity like price gouging — a defined legal term in which specific violations of trade practices law occur — with inflation, which is a broad, macroeconomic measure of increases in consumer prices over time due to supply chain cost pressures. In the context of food, inflation impacts how far the dollar goes when buying groceries. “Americans should feel confident that the food industry has zero tolerance for deceptive practices like price gouging, an illegal activity that has no place in our stores and is inconsistent with the way the food industry conducts its business of feeding American families,” Sarasin said. “When discussing food prices, it is imperative that our conversations remain grounded in reality and data, rather than rhetoric.” Meanwhile, The New York Times said today that taking action against corporations for raising food prices “polls well with swing voters,” but economists have mixed views on whether food and retail grocery companies are engaged in what might be considered price gouging. Harris’ position may be more popular due to the controversies surrounding the proposed merger of the Kroger and Albertsons grocery store chains and the news this week that Mars, the candy and pet food company, plans to spend $36 billion to buy Kellanova, which makes well-known packaged foods like Eggo, Pop-Tarts and Pringles. |
