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The Biden administration is focused on supermarket prices and wants food retailers to lower prices on household essentials.
“There are still too many companies in America ripping people off: price gouging, junk taxes, greed, shrinking inflation,” President Joe Biden said earlier this month in the South Carolina.
According to a New York Times report on Friday, the comments, according to the president’s aides, appear to be a preview to pressure the Biden administration to seek to enforce supermarket operators and other companies that maintain higher profit margins than usual. .
“Our message is very clear and one that the president leans on and will continue to lean on, which is that if you’re a company whose production prices have gone down and you’re not passing those savings on to the consumer, he’s going to call you out,” Jared Bernstein, chairman of Biden’s Council of Economic Advisers, said in a virtual meeting with reporters, according to a Reuters account of the event.
Bernstein did not identify any specific company.
A White House analysis of census data found that food and beverage retailers’ revenue as a percentage of their costs has risen sharply since before the pandemic to a level not reached since the mid-2000s, Reuters reported. According to the New York Times, margins have increased by about two percentage points since the eve of the pandemic.
The Biden administration’s fixation on supermarket prices comes as the Federal Trade Commission is trying to make a decision on Kroger’s prices (NYSE:KR) planned the nearly $25 billion purchase of Albertsons (NYSE: ACI), which some states and politicians believe will lead to higher prices for consumers.
“We agree with President Biden,” a Kroger spokesperson told Reuters. “Too many grocery stores in America have increased margins compared to Kroger.”
The spokesperson added that the merger would “lower prices for even more American consumers, providing at least half a billion in additional pricing investment at Albertsons stores.”
The merger faces stiff resistance not only from the FTC but also from state attorneys general, members of Congress and even the Teamsters union which has urged the FTC to block the deal amid concerns that combining the two would stifle competition and lead to job cuts. .
On Wednesday, FTC Commissioner Rebecca Kelly Slaughter said the antitrust regulator is “extremely focused” on blocking bad deals after Amazon (AMZN) wrapped up its planned $1.4 billion acquisition of iRobot (IRBT) on Monday ).
Earlier this month, the Washington State Attorney General filed a lawsuit to block the merger of grocery chains Kroger (KR) and Albertsons (ACI). The lawsuit argued that the $25 billion settlement would raise prices and harm consumers.
Kroger (KR) and Albertsons (ACI) received a second request from the FTC in December 2022. Kroger has been working to try to appease the FTC so the antitrust regulator can approve the deal, including a plan announced in September to sell 413 stores for $1.9 billion to C&S Wholesale Grocers.