Busted: Largest Grocers Exploited Consumers During Pandemic Disruptions
FTC’s report found that the largest grocers took advantage of supply chain disruptions during the pandemic to raise prices on consumers.
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Big corporations have been stealing from consumers for too long.
For decades, big companies have been gobbling up independent businesses while our government looked the other way.
Now, the few remaining corporations in food and agriculture are unrivaled in size and extremely powerful.
These mega corporations use a host of anticompetitive practices to grow their profit margins and maintain their hold on the market — such as price-gouging schemes that hurt farmers, eaters, and the entire economy.
Farm Action is standing guard against corporate greed. When our team catches them in the act, we sound the alarm for the media, the public, and the enforcement agencies — the Federal Trade Commission (FTC), the Justice Department (DOJ), and the U.S. Department of Agriculture (USDA) — that can put an end to this abuse.
Market concentration has allowed a handful of corporations to accumulate and maintain power over the food system.
Why does this matter?
We are fighting for a truly competitive food and farm system driven by independent businesses: mom and pop shops, family-owned farms, first-time ranchers just starting up. These kinds of businesses feed and employ their community members — instead of squeezing them for every penny they can get to enrich corporate shareholders.
Below are just three recent examples of corporate price gouging, and what we’re doing about it.
In January 2023, egg prices spiked abruptly: up to an astounding 150% nationwide. Dominant companies blamed avian flu and inflation, and while these issues caused real problems for farmers and consumers, our team looked closely at the numbers and saw that the math didn’t add up.
According to their own financial statements, Cal-Maine, which controls 20% of the market, increased its gross profit margins five-fold after drastically raising the price of its eggs. Meanwhile, the company reported no cases of avian flu and their production costs had gone up only marginally.
We couldn’t let this brazen price gouging go by unnoticed. We called on the FTC, DOJ, and USDA to coordinate their efforts to investigate and hold accountable any major egg companies engaging in price gouging or other deceptive practices. We also encouraged state attorneys general to take action to protect their consumers against these abusive companies.
Thanks to the coverage that our letter generated on thousands of news outlets — including the Today Show, Reuters, Time, Fox Business, Vice, Yahoo Finance, CNBC, The Hill, AP, The Guardian, and CNN — these companies’ record profits and excuses were exposed.
Soon after, egg prices dropped, and USDA referenced the negative media against the egg industry as one cause.
Farm Action’s letter calling for an investigation into potential price gouging was featured on the Today Show.
Liar, liar, plant’s on fire! It’s been four years since Tyson used a fire at its Holcomb, KS meatpacking plant as an excuse to jack up retail prices and cut payments to cattle producers.
The top four meatpacking companies keep bringing this fire up — most recently at a House Agriculture Committee hearing that was investigating unfair practices in cattle markets. Their defense was that supply chain disruptions had caused record-breaking prices.
In truth, the Holcomb fire illustrates how giant corporations have the power to manipulate the market, using any disruption — a fire, a war, a pandemic — to benefit their own bottom line at the expense of everyone else.
After that hearing, we sent a letter to the members of the House Agriculture Committee, urging them to keep investigating and holding monopoly corporations accountable.
This isn’t the first time Farm Action has called out the meatpacking monopoly for using supply chain disruptions to cover up price-gouging and other anticompetitive behavior. We won’t stop until we’ve shifted power over the food system out of the hands of consolidated corporations.
Months before Russia’s invasion of Ukraine, fertilizer prices spiked to all-time highs. These spikes coincided suspiciously with an increase in income farmers earned from commodity crops like soybeans and corn. When we looked into it, we found that fertilizer corporations’ own financial statements disproved their excuses about higher costs and supply chain issues.
So the Farm Action team called on the DOJ to investigate. We also published a research paper and testified before Congress in our campaign to bring attention to the price gouging.
In June of 2022, we were joined by 23 signing organizations in urging the USDA to create a more competitive fertilizer industry by directing investment away from consolidated corporations, monitoring price-gouging, and by more aggressively preventing corporate mergers.
Farm Action is working on long term solutions to transform the food and farm system, like supporting alternative fertility management systems. If we shift government support toward programs that reward farmers for the use of regenerative practices that use less fertilizer, we can free farmers from under the thumb of consolidated corporations.
Notice some common themes? Large, corporate entities have been hiking up prices under cover of headline-making events for way too long — and the American people are sick of padding corporate wallets.
Here are some ways we can all come together to fight back against corporate greed.
For starters, the DOJ and FTC could more robustly enforce the Clayton and Sherman Acts and prosecute corporations found in violation. The Biden Administration’s “whole of government” approach laid out in the Executive Order on Competition directed the FTC, DOJ, and USDA to coordinate investigation efforts and hold accountable any corporations engaging in price gouging or other deceptive practices. Farm Action is closely monitoring the agencies’ progress on their assigned directives.
The FTC and DOJ have the power to block mergers that create giant, consolidated, market-controlling behemoths. Farm Action has also urged them to better enforce our nation’s antitrust laws and prioritize competition as they review mergers. Under the Robinson-Patman Act, they could start investigating and exploring the extent of abuses and target their enforcement efforts. Farm Action’s political partner, Farm Action Fund, has also endorsed legislation that would even break up harmful mergers from decades past.
Farm Action Fund has endorsed the Competitive Prices Act, which will make it clear that collusion of any kind violates our antitrust laws — and then make it possible to enforce those laws.
Together, these solutions will shift power from corporations to independent producers and businesses, and ultimately will help transform the food and farm system into one that is more fair and competitive.
With your support, the Farm Action team can keep fighting for food system reform.
FTC’s report found that the largest grocers took advantage of supply chain disruptions during the pandemic to raise prices on consumers.
Farm Action and allies asked DOJ and FTC to investigate Koch Industries’ acquisition over concerns it would further concentrate the fertilizer industry.
America’s antitrust enforcers must prevent dominant firms from capitalizing on investments made with public resources, we told DOJ and FTC in a letter.
The Farm Action News Roundup is a biweekly newsletter with breaking news, upcoming events, and thoughtful coverage about the fight against monopoly power. Farm Action Alerts are new way for you to join the fight against monopoly corporations. We will send only the most effective and streamlined alerts so that you can take direct action straight from your inbox. In mere minutes, you can help build a more fair food system.
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