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Vice President Kamala Harris is planning to take action to combat price gouging, and some are pushing back on the proposed ban.
“The proposal calling for a ban on grocery price gouging is a solution in search of a problem,” the National Grocers Association (NGA) said in a statement last week.
The trade association said independent grocers are feeling the pinch just as acutely as their customers. Rising costs in labor, rent, swipe fees, and utilities, are key areas that are forcing small businesses to operate on razor-thin margins.
Moreover, NGA said independent grocers are increasingly at a disadvantage when compared to the market power of big box retailers, in part because they can leverage their scale to negotiate better deals, while exerting their influence in ways local shops can’t match. The association argues the imbalance is impacting profitability and is contributing to higher prices for consumers overall.
“We’re hoping the next Administration (and the current one) will look closely at anticompetitive behavior, including price discrimination,” NGA said.
Last week, Democratic presidential candidate Harris said that within her first 100 days in office she would take aim at high grocery bills by implementing a ban on corporate price gouging, adding that she would also look to empower the Federal Trade Commission (FTC) and state attorneys general to impose significant penalties on violators.
Earlier this month, FTC Chair Lina Khan said the agency would push for an inquiry into the ongoing surge in grocery prices that started during the Covid-19 pandemic and that has since persisted.
Even with Harris’ broad economic plan, which includes other key provisions, such as child tax credits expansions, funding for affordable housing, and a corporate tax hike, not everyone sees her price gouging ban panning out.
“They tried that in Venezuela, Cuba, North Korea, the USSR,” Shark Tank’s Kevin O’Leary told CNN in an interview over the weekend. “No, that’s not going to work.”
Meanwhile, former President Donald Trump has also pushed back on claims that under a Harris presidency a price gouging crackdown would be possible. At a rally in Pennsylvania on Saturday, Trump said that a ban would force consumers to deal with “food shortages, rationing, hunger, and dramatically more inflation.”
An industry wide call out on grocery hikes comes at time when prices have soared by roughly 25% in the last four years, outpacing the rise in consumer goods, according to the U.S. Department of Agriculture.
To address surge in consumer prices, the NGA proposed three ways Washington can take action: lower swipe fees, reduce excessive regulation, and enforce existing laws such as the Robinson-Patman Act, an antitrust law designed to prevent discrimination and promote fair competition.