Two Democratic MPs are calling for an inquiry into supermarkets that they claim may be overcharging their patrons.
The Federal Trade Commission and the Department of Agriculture were urged to look into whether “major grocery chains may be making false and misleading representations regarding food sold by weight, leading to customers paying more for groceries than expected” in a letter sent by Sen. Elizabeth Warren, D-Mass., and Rep. Adam Schiff, D-Calif., which was seen by NBC News.
Both congressmen are running this year and are from states that lean Democratic. Currently serving as a high-ranking member of the House, Schiff is leading the race to become California’s junior senator, while Warren is expected to be re-elected.
Their move in the last stages of the election is unlikely to lead to any immediate government action, particularly if Republicans win the presidency again.
It comes after the Biden-Harris administration made many attempts to get grocery stores to reduce their costs, and if elected, Vice President Kamala Harris had planned to stop exorbitant increases in food prices. In an election when affordability is a major concern, she and former President Donald Trump have both attempted to convince voters that they are committed to addressing living expenses.
Prosecutors in California said that Albertsons and its subsidiaries Safeway and Vons “illegally charged customers prices higher than their lowest advertised or posted price” and mislabeled commodities sold by weight, such as meat, fruit, and baked goods, according to the letter.
Albertsons denied any wrongdoing in the $4 million settlement of the lawsuit reached in early October, but Warren and Schiff stated that they think more research is necessary to rule out the possibility of “similar predatory pricing practices nationwide.”
The letter said that “too often, big grocery stores take advantage of consumers by raising the prices of necessities and using their enormous market power.” It was signed by Sen. Bernie Sanders, I-Vt., as well as four other senators and ten other congressmen, all of whom are Democrats.
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Requests for response from the USDA, the FTC, and Albertsons were not immediately answered.
In May, Warren said during a Senate committee that “grocery prices are up because of good old-fashioned corporate price gouging,” which she ascribed to a “small number of companies controlling every level of the food chain.” Warren has previously accused grocery chains of exploiting consumers.
She and Schiff claimed in their letter on Sunday that Albertsons could have broken federal law by engaging in “unfair or deceptive acts or practices” that are forbidden by the Federal Trade Commission Act. According to them, the business could have also failed to declare the proper amounts in some items, which is mandated by the Fair Packaging and Labeling Act.
Following the California settlement, Albertsons stated that it will display signage and provide more training to “better ensure real-time accuracy in stores” as part of its commitment to its pricing accuracy promise.
Albertsons has had other issues this year besides the price conflict. To stop Kroger’s acquisition of Albertsons, which the FTC said would “eliminate competition and raise grocery prices for millions of Americans,” the agency filed a lawsuit against the supermarket behemoth in February.
The planned merger, according to the Biden-Harris administration, would lessen competition, raise consumer expenses, and put pressure on supermarket workers’ pay.
The businesses argue that a partnership would benefit them by enabling them to more effectively compete with rivals such as Costco, Walmart, and Amazon. This summer, if the merger is approved, Kroger promised to cut prices by $1 billion when it closes.
One of the main issues facing households throughout the most recent inflationary period has been the cost of food. Between January 2021 and December 2022, grocery costs increased by 20%, which led some customers to reduce their purchases of staples like eggs and red meat. However, inflation is already almost back to normal; grocery costs have been rising by less than 2% annually since November 2023.
According to a recent Bank of America research, many individuals still believe that we are living in an era of inflation. Many people are living paycheck to paycheck and spending a significant portion of their income on basics, even if average hourly earnings improvements are surpassing inflation.
The emergence of electronic price tags on shop shelves and the “dynamic pricing” they may allow have also stoked worries about possible price gouging in supermarkets, especially at Kroger and Walmart. According to the corporations, the tags enable staff members to alter pricing as frequently as every ten seconds, which enables them to expedite processes and replenish inventory more quickly.
The technology at Kroger, however, “may allow the company to surge grocery prices and exploit consumers,” according to Warren and Schiff, whose letter also addressed the issue. Warren expressed this worry in a letter to the chain’s CEO in August.
Kroger has refuted the assertion, stating that it will only utilize computerized pricing to reduce prices when it is practical.
