The COVID-19 pandemic has made the grocery supply chain literally a kitchen table issue for most Americans.  Inconsistent supply has laid bare the issue of economic discrimination in the grocery marketplace.  High demand consumer products like paper, cleaning supplies, and popular packaged food – both branded and private-label -are being diverted to the largest volume retailers at the expense of independent grocers and others in the marketplace. The influence of mega power buyers on the supply chain is more apparent than ever.

In 1936 Congress passed the Robinson-Patman Act, a law designed to protect small businesses from discriminatory terms of trade.  Unfortunately, this law is no longer enforced by regulators and the courthouses are all but closed to private party lawsuits.  As a result of this lack of enforcement, dominant players in the marketplace (also known as “power buyers”), including big tech giants, are using their influence to impose conditions on manufacturers and suppliers that ultimately disadvantage smaller rivals and their ability to compete.

For the first time in decades, there is real, bipartisan momentum for antitrust reform and recognition that dominate players in the marketplace can and do have a negative impact on local economies and communities.  Congress and federal regulators are investigating and pursuing action against “big tech” giants, including Apple, Google, Facebook, and Amazon.  Many of the anticompetitive behaviors unearthed by these investigations draw close parallels to the experience in our industry where the largest firms dictate terms of the trade.  Thanks to the efforts of NGA and some of our members, Congress is keenly aware of the supply chain challenges our industry has faced and has indicated an interest in this topic as it relates to their oversight of antitrust laws.

An important fact, sometimes overlooked, is antitrust laws, such as the Robinson-Patman Act, not only protect retailers but are intended to also protect manufacturers and suppliers from power buyers who seek to use their scale to exert undue influence.  The lack of enforcement has hurt manufacturers of all sizes and exposed them to the growing influence of power buyers that increasingly dominate segments of the marketplace.

Recently, the NGA Board of Directors unanimously approved a policy position and action plan that seeks to enact reform of antitrust laws, specifically the Robinson-Patman Act.  Regulators must be provided with the resources and new tools to enforce the laws on the books and Congress must exercise its oversight authority by investigating the influence of power buyers on the food industry and the lack of enforcement.  NGA is committed to leading this effort for reform.

Bringing about reform will not be easy; however we believe for the first time in decades we have a real chance at enacting reforms that advance diversity in the marketplace and in turn will ultimately benefit independent supermarkets, manufacturers, suppliers, consumers, and the communities they serve.

_________

Article provided thru the National Grocers Association (NGA).

If you would like to learn how you can be part of the solution to bring about antitrust reform, please contact Greg Ferrara, NGA President, and CEO at gferrara@nationalgrocers.org or click HERE to support NGA’s efforts on your behalf.