Vice President Kamala Harris’s plans to introduce a federal policy to stop food price gouging as part of her presidential campaign’s economic agenda sparked a backlash from major U.S. food industry organizations.
On Friday, August 16, during a campaign event in Raleigh, North Carolina, Harris presented her proposal to tackle the problem of high food prices: a federal ban on price gouging across the food industry.
While nearly 40 states have laws banning price gouging, there is no federal law against the practice.
In her speech, Harris said, “I know most businesses are creating jobs, contributing to our economy, and playing by the rules, but some are not, and that’s just not right, and we need to take action when that is the case.”
“As president, I will go after the bad actors. And I will work to pass the first-ever federal ban on price gouging on food.”
Harris explained that her plan would include new penalties for opportunistic companies that take advantage of crises, skirt the rules, and support smaller food companies trying to comply with the laws and get ahead.
The vice president said they would help the food industry become more competitive. “I believe competition is the essence of our economy. More competition means lower prices for you and your families.”
Industry Response to Harris Plan to Tackle Food Price Gouging
Leaders of three of the most influential organizations in the food industry had adverse reactions to Harris’ announcement.
Greg Ferrara, president and CEO of the National Grocers Association:
“The proposal calling for a ban on grocery price gouging is a solution in search of a problem. Our independent grocers, already operating on extremely thin margins, are hurting from the same inflationary pressure points as their customers. Labor, rent, swipe fees, utilities; you name it, the price has increased. But what’s really hurting our local, independent grocers, is the lack of fair competition with big box retailers, who leverage their influence in ways that your independent grocer down the street can’t, leading to increased prices for everyone else.
“We’re hoping the next Administration (and the current one) will look closely at anti-competitive behaviors, including price discrimination, that are increasing prices for independent grocers and the community members they serve.
“We firmly believe that rather than proposing new legislation far-off in the future, the Government should be enforcing the Robinson-Patman Act, a key antitrust law that already exists but has been ignored for decades as big chains unfairly wield their influence.
“If Washington is serious about helping lower prices for consumers, it can help in three important ways: lower skyrocketing swipe fees, rein in excessive and burdensome regulations, and enforce antitrust laws like the Robinson-Patman Act that enhance price competition amongst retailers, regardless of size or location.”
The Food Industry Association President and CEO Leslie G. Sarasin issued the following statement:
“Inflation has caused the price of many consumer goods – from gasoline to apparel – to increase. But 2024 Consumer Price Index (CPI) numbers reveal that the pace of year-over-year inflation continues to moderate, and food prices actually represent a bright spot in the data. In fact, yesterday’s July CPI placed year-over-year food-at-home inflation at 1.1%, which remains below the 2.9% increase in overall inflation.
“Food retailers’ profit margins are, and always have been, extremely tight – just 1.6% last year. The entire food industry works tirelessly – amidst fierce competition – to address inflation and keep prices as low as possible to meet the needs of shoppers. However, the food industry continues to face significant economic headwinds – including increases in labor costs, volatile energy prices, an uptick in climate change-related severe weather events, supply chain challenges, and an unprecedented level of regulatory burden – that increase the costs to produce food and get it to store shelves.
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“It is both inaccurate and irresponsible to conflate an illegal activity like price gouging – a defined legal term in which specific violations of trade practices law occur − with inflation, which is a broad, macroeconomic measure of increases in consumer prices over time due to supply chain cost pressures. In the context of food, inflation impacts how far the dollar goes when buying groceries.
“Americans should feel confident that the food industry has zero tolerance for deceptive practices like price gouging, an illegal activity that has no place in our stores and is inconsistent with the way the food industry conducts its business of feeding American families.
“When discussing food prices, it is imperative that our conversations remain grounded in reality and data, rather than rhetoric.”
The Meat Institute issued the following statement from Meat Institute President and CEO Julie Anna Potts:
“Consumers have been impacted by high prices due to inflation on everything from services to rent to automobiles, not just at the grocery store. A federal ban on price gouging does not address the real causes of inflation.
“The Harris campaign rhetoric unfairly targets the meat and poultry industry and does not match the facts. Food prices continue to come down from the highs of the pandemic. Prices for meat are based on supply and demand. Avian influenza, a shortage of beef cattle, and high input prices like energy and labor are all factors that determine prices in the meat case.
“Prices that livestock producers receive for their animals are also heavily influenced by supply and demand. Prices for cattle producers are especially at record highs, surpassing the previous record highs in 2014-2015. Today, well into 2024, cattle prices remain at record levels because the US has the lowest cattle inventory since Harry Truman was President.
“Major meat companies have reported losses during the Biden-Harris Administration, with some closing facilities and laying off workers.”