May 13, 2024

Warren, McGovern, Lawmakers to President Biden: Use Executive Authority to Lower Food Prices

“Americans are facing sky-high food prices, caused by excessive price gouging by food and grocery giants.”

“The federal government should use every possible tool to lower food prices. We believe you can exercise your executive authority to take additional action to address rising food prices without congressional action.”

Text of Letter (pdf)

Washington, D.C. - United States Senator Elizabeth Warren (D-Mass.) and U.S. Rep. Jim McGovern (D-Mass.) are leading a group of lawmakers in a letter to President Joe Biden encouraging the Biden administration to use its executive authority to take robust actions to lower food prices for families. In the letter, the lawmakers note how corporations have been raking in record profits while families are being hit with higher costs for groceries, and they outline several executive actions that the Biden administration should take. 

“The federal government should use every possible tool to lower food prices,” wrote the lawmakers. “We believe you can exercise your executive authority to take additional action to address rising food prices without congressional action.”

Americans are facing sky-high food prices, caused by excessive price gouging by food and grocery giants. A small group of players dominate those industries: four grocery retailers account for over a third of national grocery sales and four food companies control more than 60 percent of sales in most grocery categories. As a result, consumers are spending more of their income on food than they have in the past 30 years.

“These companies have raked in record profits in recent years, with CEOs bragging on earnings calls about how their price hikes exceed inflation. Between 2020 and 2021, researchers found that corporate profits accounted for more than 50% of food price increases, whereas they accounted for only 11% of increases in the four decades prior,” the lawmakers wrote.

While some corporations may point to rising inflation, grocery price increases have outpaced inflation, with families paying 25% more for groceries as compared to before the pandemic. These higher prices hit low-income families the hardest: in 2022, the bottom fifth of the income spectrum spent 25% of their income on groceries, compared to less than 3.5% for the highest fifth.

In the letter, the lawmakers urge the administration to leverage the full scope of their executive authority and consider the following proposals:

  1. Encourage the Federal Trade Commission (FTC) and work with the U.S. Department of Agriculture (USDA) to prohibit exclusionary contracting by dominant firms in the food industry.
  2. Encourage the FTC to issue guidance on potential violations of the Robinson Patman Act and Section 5 of the FTC Act within the food industry, and investigate and take enforcement action where merited.
  3. Work with USDA to increase the number of government contract recipients that are very small businesses.
  4. Work with USDA to ensure that technical factors reflect the long-term costs of food sector consolidation.
  5. Urge the Department of Justice (DOJ) and the FTC to scrutinize, and where appropriate, block mergers and acquisitions in the food and agricultural sectors.
  6. Encourage the DOJ to prosecute actors in the agricultural and food sectors for price fixing and other anticompetitive behavior.
  7. Direct the CFTC and FTC to form a joint task force to investigate food price manipulation throughout the supply chain.

These actions would complement Senator Warren’s Price Gouging Prevention Act, and Senator Casey’s Shrinkflation Prevention Act, which would crack down on corporate price gouging.  

“Americans across the political spectrum have pointed to the cost of food and groceries as their top concern related to inflation,” wrote the lawmakers.“These proposals are just examples of the additional actions your Administration can take to help families at the grocery store. The American people are relying on your Administration to combat corporate greed and higher food prices.”

This letter is signed by Senators Richard Blumenthal (D-Conn.), Cory Booker (D-N.J.), Bernie Sanders (I-Vt.), Peter Welch (I-Vt.), Martin Heinrich (D-N.M.) and U.S. Representatives Julia Brownley (D-Calif.), Matt Cartwright (D-Penn.), Greg Casar (D-Texas.), Rosa DeLauro (D-Conn.), Raja Krishnamoorthi (D-Ill.), Eleanor Holmes Norton (D-D.C.), Ilhan Omar (D-Minn.), Chellie Pingree (D-Maine.) Delia Ramirez (D-Ill.), Linda Sanchez (D-Calif.), Bonnie M. Watson Coleman (D-N.J.), James McGovern (D-Mass.), Nydia Velázquez (D-N.Y.), Jahana Hayes (D-Conn.), Julia Brownley (D-Calif.), Richard Neal (D-Mass.), Adam Schiff (D-Calif.), Becca Balint (D-Vt.), Alexander Ocasio-Cortez (D-N.Y.), Bennie Thompson (D-Miss.), Jan Schakowsky (D-Ill.), Ro Khanna (D-Calif.), Rashida Tlaib (D-Mich.), (Sheila Jackson Lee (D-Texas), Mark DeSaulnier (D-Calif.), Barbara Lee (D-Calif.), Seth Moulton (D-Mass.), Susan Wild (D- Penn.), Jesus “Chuy” Garcia (D-Ill.), Mark Pocan (D-Wisc.), Chris Deluzio (D-Penn.), Glenn Ivey (D-Md.), Andre Carson (D-Ind.), (Ayanna Pressley (D-Mass.), and Josh Harder (D-Calif.). 

The letter is endorsed by the American Economic Liberties Project, Campaign for Family Farms, Farm Action, Farm Aid, Food and Water Watch, Main Street Alliance, Open Markets Institute, Small Business Majority, Friends of the Earth, P Street, Institute for Local Self-Reliance. 

As a champion for American consumers and a secure and healthy economy, Senator Warren has engaged in oversight of corporations for unfairly increasing prices for consumers. She has also been calling for more competition and stronger enforcement of antitrust laws to bring down prices for families: 

  • On May 3, 2024, during a hearing of the U.S. Senate Committee on Banking, Housing, & Urban Affairs, Senator Warren called out food industry price gouging and urged action to combat unfair pricing practices.
  • On March 28, 2024, Senator Elizabeth Warren (D-Mass.) and Representative Mary Gay Scanlon (D-Penn.) led a group of 14 lawmakers in a letter to FTC Chair Lina Khan urging the agency to revive enforcement of the Robinson-Patman Act (RPA), a critical tool to promote fair competition in the food industry. 
  • On February 28, 2024, Senator Warren joined Senator Bob Casey (D-Pa.) in introducing the Shrinkflation Prevention Act to crack down on corporations that deceive consumers by selling smaller sizes of their products without lowering prices.
  • On February 15, 2024, Senators Warren, Baldwin, Casey, and U.S. Representative Jan Schakowsky (D-Ill.) reintroduced the Price Gouging Prevention Act of 2024, which would protect consumers and prohibit corporate price gouging by authorizing the FTC and state attorneys general to enforce a federal ban against grossly excessive price increases.
  • In December 2023, Senator Warren urged the FTC to block the Kroger-Albertsons merger, which would give the five largest food retail companies control of 55 percent of all grocery sales, allowing them to further control and ultimately raise consumer prices, while also reducing job competition, decreasing wages, and decreasing the bargaining power of organized labor.
  • In November 2023, Senator Warren called out TransDigm for its refusal to provide cost and pricing information needed to prevent price gouging of taxpayers and the Department of Defense.
  • In the past few years, Senator Warren has urged the Biden administration to closely scrutinize other potentially anticompetitive mergers that could lead to higher prices for consumers and accelerate industry consolidation. She has led letters about the proposed mergers of Frontier and Spirit airlines, JetBlue and Spirit Airlines, Sanderson-Wayne, WarnerMedia-Discovery, and Amazon-MGM.
  • In March 2022, Senator Warren introduced the Prohibiting Anticompetitive Mergers Act to help stomp out rampant industry consolidation that allows companies to raise consumer prices and mistreat workers. The bill would ban the biggest, most anticompetitive mergers and give the Department of Justice and Federal Trade Commission the teeth to reject deals in the first instance without court orders and to break up harmful mergers.
  • In February 2022, at a hearing, Senator Warren called out corporations for abusing their market power to raise consumer prices and boost profits.
  • That same month, Senator Warren requested the Department of Justice to take aggressive action against corporations violating antitrust laws to hike prices for consumers.
  • In January 2022, Senator Warren questioned Federal Reserve nominee Lael Brainard about market concentration and price gouging driving inflation.
  • At a January 2022 hearing, Senator Warren pressed Fed Chair Jerome Powell on the role of corporate concentration in driving up prices for consumers during his renomination hearing to be Chair of the Board of Governors of the Federal Reserve System.
  • In a New York Times op-ed published in April 2020, Senator Warren urged Congress to focus on cracking down on price gouging in its ongoing effort to address the impact of the coronavirus pandemic.
  • In March 2020, Senator Warren joined her colleagues in urging the FTC to use its full authority to prevent abusive price gouging on consumer health products during the COVID-19 pandemic. 

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