Federal Trade Commission to Probe Grocery Practices
Statement of CSPI President Dr. Peter G. Lurie
Long before the current concerns about supply chain disruption, CSPI was concerned about anti-competitive practices in the grocery industry that dictate Americans’ choices and undermine our health. That’s why, in February of this year, we asked the Federal Trade Commission to use its authority under section 6(b) of the Federal Trade Commission Act to launch an investigation into cooperative marketing agreements, “category captains,” and other trade promotion practices common in the grocery industry.
These grocery retail practices drive up entry costs and cede control of critical retail decisions to leading brands, placing smaller manufacturers and fruit and vegetable producers at a disadvantage in the marketplace. These practices are a main reason that healthier foods, such as fruits and vegetables, rarely appear outside the produce section or in the most trafficked areas of the store and why less healthy products like sugar-sweetened beverages appear repeatedly in stores, as a recent CSPI report demonstrated.
Previous scrutiny of the grocery industry on the part of the FTC barely scratched the surface of these issues. And in the intervening years, the industry’s data collection practices, be they in-store or online, have also changed dramatically with technology. But it is clearly a new dawn at the FTC. We are very glad that, as part of the FTC’s investigation of supply chain disruptions, the agency has ordered retailers, wholesalers, and suppliers to provide detailed information about the shadowy practices that characterize the modern-day grocery industry. For example, the agency ordered several large retailers to detail their “use or acceptance of trade promotions” and to produce contracts with manufacturers governing these trade promotion practices. We hope that the agency publicly reports its findings followed by the enforcement actions that flow from these findings.