WASHINGTON D.C. — U.S. Senator Martin Heinrich, D- N.M., joined Senate colleagues to urge President Joe Biden to use executive authority to lower food prices for families in New Mexico and across the country on May 16.
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% 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.
“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,” the lawmakers wrote in a letter to the president. “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.»
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, Heinrich and his colleagues urge the president to leverage the full scope of his executive authority and consider the following proposals:
Encourage the Federal Trade Commission and work with the U.S. Department of Agriculture to prohibit exclusionary contracting by dominant firms in the food industry.
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.
Work with USDA to increase the number of government contract recipients that are very small businesses.
Work with USDA to ensure that technical factors reflect the long-term costs of food sector consolidation.
Urge the Department of Justice and the FTC to scrutinize, and where appropriate, block mergers and acquisitions in the food and agricultural sectors.
Encourage the DOJ to prosecute actors in the agricultural and food sectors for price fixing and other anticompetitive behavior.
Direct the CFTC and FTC to form a joint task force to investigate food price manipulation throughout the supply chain.
The letter is led by U.S. Senator Elizabeth Warren, D-Mass.
Alongside Heinrich, the letter is signed by U.S. Sens. Richard Blumenthal, D-Conn., Cory Booker, D-N.J., Bernie Sanders, I-Vt., and Peter Welch, D-Vt.
By Sen. Martin Heinrich
