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“Predatory Pricing”: Lawmakers Call on FTC to Investigate Albertsons and Other Major Grocers

“Predatory Pricing”: Lawmakers Call on FTC to Investigate Albertsons and Other Major Grocers

Senator Elizabeth WarrenD-Mass and Rep. Adam SchiffD-Calif., appeal to the Federal Trade Commission and the Ministry of Agriculture to investigate Albertsons and other major supermarket chains for “predatory pricing practices” that may violate federal law.

In one letter sent to FTC Chairman Lisa Khan and USDA Secretary Tom Vilsack, Warren and Schiff expressed concern that chains, including Albertsons, “may be making false and misleading statements about foods sold by weight, causing customers to pay more for groceries than expected.” ”

There is precedent for their concern. Last month, California prosecutors reached a $3,962,500 settlement with Albertsons Companies, Inc. – and its subsidiaries Safeway and Vons – to resolve allegations that the companies engaged in “false advertising and unfair competition.” Specifically, the civil complaint filed by the Plaintiff’s team alleged that the grocers unlawfully charged their customers prices that were higher than their lowest advertised or posted price.

In addition to what prosecutors classified as “scanner violations,” the grocers also had inaccurate weights on the labels of their products, meaning customers paid more for “produce, meats, baked goods and other items (that) had less product in the package than usual was’. shown on the package label.”

In a statement Sonoma County District Attorney Carla Rodriguez, released after news of the settlement, said: “It is a priority for my office to trust that companies are selling products to consumers that are accurate by weight and price, especially in today’s economy. My Environmental and Consumer Law Division is working with the Sonoma County Department of Agriculture Commissioner/Weights and Measures to ensure that businesses in our community are charging consumers correctly.”

However, Warren and Schiff argue in their letter that more research needs to be done.

“Albertsons is one of the largest food retailers in the United States, with more than 2,200 stores nationwide. This settlement covers the 589 Albertsons stores in California, but all U.S. customers must be protected from predatory pricing,” the lawmakers wrote in their letter. “To ensure that no Albertsons store overcharges customers for essential groceries, we urge the FTC and the U.S. Department of Agriculture (USDA) to investigate whether other Albertsons stores or other major supermarket chains have committed similar wrongdoings and, if necessary, hold responsible parties accountable.”

When speaking with The hillthe FTC confirmed it had received the letter but had no further comment, while a spokesperson for Albertsons Companies said the company “follows all local pricing rules and regulations in the various communities where we operate, and we are working quickly to resolve any correct price differences. .”

According to the release, the spokesperson also said that “the lawsuit filed in California stemmed from administrative errors at the local store level and the company has since made changes to its processes to reduce the risk of a similar error occurring in the future.”

“All American customers must be protected from predatory pricing.”

The push for further investigation comes as a proposed merger between Albertsons and Kroger — another major supermarket chain with subsidiaries including Mariano’s, King Soopers, Food 4 Less and Food Lion — remains in a complicated legal limbo. Multiple state and federal lawsuits seeking to block the merger have been completed, but rulings are still pending.

In October, the FTC wrapped up a high-profile antitrust case in Portland, aiming to block the merger over concerns it would stifle competition, especially in smaller markets, which could lead to a price increase for consumers. Meanwhile, states such as Washington and Colorado have filed separate cases, also over concerns that the merger would be anticompetitive.

In response, Kroger and Albertsons leadership have argued that the merger will simply allow them to compete with non-union giants like Walmart And Amazonand promising benefits such as price reductions and operational efficiencies.

This push from Warren and Schiff also reflects what a major political issue the cost of daily necessities like groceries has become. In February, President Joe Biden denounced the concept of “shrinkflation” – reducing the quantity or quality of an item, yet keeping the price static – before the Super Bowl, saying that “it’s a rip-off.” A few months later, in his annual State of the Union address, Biden returned to the topic again.

“Too many companies are raising prices to boost profits and charging more and more for less and less,” he said, before nodding to the Shrinkage Prevention Acta bill proposed by Democratic Senator Bob Casey that aims to “direct the Federal Trade Commission to issue regulations to declare shrinkage an unfair or deceptive act or practice.”

Vice President Kamala Harris also made grocery prices part of her 2024 presidential campaign, noting that she would try to combat price gouging and “greed inflation” if elected, a position that The food industry is seriously divided.

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