Published on August 15, 2024, 12:35 am

Federal Trade Commission Chair Lina Khan recently announced an investigation potentially aimed at placating voters, directed toward so-called “Big Grocery.” Specifically, she aims to find out if corporate greed plays a role in high grocery prices that have seen a sharp increase of 21% since the beginning of 2021. The implication here is that big corporations, rather than government policies or external economic factors, are responsible for the escalation in food costs.

For context, grocery prices have indeed spiked dramatically from consistent tracking of inflation through the previous decades before catapulting in 2020. It is pivotal to observe that these surge coincides with government-enforced lockdowns which slashed across global economic cooperation—a primary factor keeping commercial rates reasonable for consumers.

In response to this predicament, Kahn’s solution seems counterproductive. She dismissed the proposed merger between Kroger and Albertsons—two prolific supermarket chains which potentially would lower grocery costs through economies of scale. The fusion could lead to cost efficiencies and operational conveniences beneficial not only to stakeholders but more importantly, buyers caught in this precarious time.

Both conglomerates offered to divest nearly 600 stores to clear themselves from anti-trust probes—yet such concessions failed satisfying progressives who remain steadfast against the deal. A consolidated argument from various anti-shopper democrats pointed out potential threats from this planned union such as possible price spikes and adverse effects on employment conditions.

These allegations appear hollow when assessed critically—as both companies saving around $1 billion annually could actually translate into lower consumer prices. Job security measures were also laid out, promising retention of all current personnel and honoring pre-existing collective bargaining agreements—an appeal gaining support even from local unions like United Food and Commercial Workers Local 555.

Another feckless claim suggests a budding monopoly posing risk for the grocery segment should Kroger and Albertsons join forces. This again falls flat as their market would encompass merely around 12% of American groceries—a position far weaker than Walmart’s 25% control. Such fusion could even inspire healthy competition among big-box retailers, offering better prices for buyers.

Trade delays because of these setbacks only engender depleted resources—an expensive ordeal over $800 million shouldered by both companies and ultimately, the consumer. Among those leading protests to block this merger is Washington, hiring premier litigation firms paid an exorbitant hourly rate to counteract a deal that ironically could reduce grocery expenses for Washington residents themselves.

Adding salt on the wound, FTC further ponders reviving the enforcement of Robinson-Patman Act—a law from the Great Depression era hindering spectators from selling like-grade commodities at varying price points. The Justice Department relinquished this Act around the 70s as it inhibits open negotiation between buyers and sellers thereby raising costs instead—yet here we are again on its brink with Khan at helm – an ironic move raising grocery expenses while oddly pursuing higher government grip over such industries.

In conclusion, if Khan was indeed sincere in reducing costs—efforts should be geared towards facilitation rather than obstruction.