Democrats in Congress are calling on President Joe Biden to use executive authority to rein in skyrocketing food prices, which have increased by 25% since the beginning of the pandemic.
U.S. Sen. Elizabeth Warren (D-Mass.) and U.S. Rep. Jim McGovern (D-Mass.) sent a letter to Biden signed by dozens of Democratic lawmakers from across the country saying that corporations are making record profits as families struggle with high food prices.
The letter calls on the administration to establish a joint task force made up of members of the Federal Trade Commission (FTC) and the Commodity Futures Trading Commission (CFTC) to investigate price manipulation throughout the supply chain.
“We believe you can exercise your executive authority to take additional action to address rising food prices without congressional action,” the letter noted.
Lawmakers could be following the lead of Australian officials who have heavily scrutinized the country’s largest grocery stores, Woolworths and Coles, which make up two-thirds of grocery sales there.
The Australian Senate’s inquiry into price gouging there led to the resignation of Woolworths CEO Brad Banducci in February.
The group said in a press release that inflation is just part of the problem concerning high food prices, and “excessive price gouging” is the real culprit.
“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 letter said.
High prices have hit low-income families hard with the lowest fifth of the income spectrum spending about a quarter of their income on groceries, according to the letter. Comparatively, the highest fifth of households spent less than 3.5% of their income on groceries.
Democrats are calling on the Biden-Harris Administration to pursue the following actions:
- Urge the FTC and U.S. Department of Agriculture to prohibit exclusionary contracting by large companies in the food industry.
- Have the FTC issue a guidance on compliance with federal legislation prohibiting price gouging, such as the Robinson Patman Act and Section 5 of the FTC Act, and enforce those rules.
- Urge the USDA to increase government contract recipients for very small businesses.
- Work with the FDA to ensure that technical factors reflect the long-term costs of food sector consolidation.
- Urge the DOJ and FTC to block mergers and acquisitions in the industry when appropriate.
- Urge the DOJ to prosecute players in the industry that engage in price fixing and other anticompetitive behavior.
- Establish a joint task force with the CFTC and the FTC to investigate food price manipulation.
“Americans across the political spectrum have pointed to the cost of food and groceries as their top concern related to inflation,” the letter stated.“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.”