The America First Policy Institute (AFPI) filed suit on behalf of local independent grocers R&E Corporation, City Fresh Supermarket, and the National Supermarket Association (NSA) against New York City over Mayor Zohran Mamdani’s socialist “N.Y.C. Groceries: A Recipe for Affordability” policy, which would establish publicly funded privately operated grocery stores, one in each borough.
Under this policy, a “Core Basket” of everyday groceries would be sold at prices averaging 30% below retail prices. The City would cover rent and property taxes, provide $70 million in capital funding for the five locations, and make ongoing taxpayer-funded “Affordability Payments” to cover operating losses.
Two of the announced locations are located within walking distance of existing independent grocery stores involved in this case. R&E has operated at its Bronx location since 1984 and is located less than one-half mile from the announced Hunts Point site. City Fresh Supermarket has operated for 15 years and is less than a five-minute walk from the proposed La Marqueta location.
Unfair advantage to compete with
The plaintiffs argue the City’s plan creates a competitive advantage independent grocers can’t compete with. Independent grocers must cover rent, taxes, employee payroll, inventory, and other operating costs, while the City’s stores would receive taxpayer-backed support to cover those same expenses. Independent grocers could attempt to lower their prices to compete, but because the City measures its 30% discount against competitors’ retail prices, City stores will always undercut them.
“This case seeks to affirm that New York City cannot use tax subsidized discounts to unfairly compete against long-standing businesses and drive them out of business,” said Richard Lawson, Vice Chair of Litigation at the America First Policy Institute, at a press conference Wednesday in Harlem.
With the City closing its request for proposals (RFP) on October 16, independent grocers face an impossible choice: bid to participate in a plan that may violate antitrust law, or sit out and watch the City build a taxpayer-backed competitor that cannot go bankrupt.
Anthony Peña, President of the National Supermarket Association, said: “Competition is part of their business, but competing against each other is different than competing against city hall. You cannot call it a level playing field when one store has to survive on what it earns, and others are being stood up by taxpayers.”
Jerry Nunez, manager of City Fresh Supermarket in Harlem, said: “We have been running City Fresh for 15 years. Fifty people have jobs because of what we have worked hard to build in this neighborhood. This is not just about a grocery store, if my store cannot survive the competition with the city run stores, we lose part of our community.”
The plaintiffs argue that the mandatory 30% discount, financed by free occupancy costs plus taxpayer-backed “Affordability Payments,” is predatory pricing, leaving City-backed stores with an unfair advantage independent grocers can’t compete with.
The plaintiffs are asking the court to extend the October 16 RFP deadline until 30 days after the court rules on the first two antitrust claims. They are not asking the court at this stage to terminate the City-backed grocery store program.
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WHAT THEY WANT THE COURT TO DO NOW
Issue a preliminary injunction directing Defendants to move the October 16, 2026, RFP deadline to a date 30 days after a ruling on the merits of Counts I and II; waive the usual injunction bond; and preserve the status quo so nobody has to bid into a possible felony conspiracy to keep a seat at the table.
This case is not a referendum on whether food is too expensive. It is not a claim that cities may never own property or subsidize food access. Is not a request that the court design a better grocery program. It is a claim that a permanent, tax-financed 30% discount pegged to competitors’ prices is the kind of “ruinous competition” the Sherman Act has condemned for more than a century—whether the war chest is a tobacco trust’s $4 million reserve or a city’s tax base.