A Federal Trade Commission (FTC) report accusing big grocery chains of price gouging opened the eyes of Connecticut State Senate Majority Leader Bob Duff.
After hearing the report, he went straight to Connecticut Attorney General William Tong, and on Thursday Tong announced the state was conducting an inquiry on food and grocery prices.
Both large and small grocers will be included in the inquiry, which could be multi-faceted and include food producers so the Connecticut state legislature can get a clearer picture of the grocery marketplace.
“We won’t stop,” said Tong during a press conference announcing the inquiry. “We will keep going until we have an understanding of this market.”
Tong said two things have bothered him about the price of food lately, specifically almonds and eggs.
“I eat a lot of nuts, and almonds are super expensive, and the price is always going up,” he said. “And basic eggs are several dollars higher than they used to be, and that impacts everyone.”
Duff opened the session by pointing out that grocery profits in the state of Connecticut are at a 70-year high and that price gouging is responsible for 50% of inflation.
“I have no problem about profits, but it’s the greed,” said Duff.
In correlation with the inquiry, the state Senate is also expecting to introduce Senate Bill 3 in the next day or two, which would give the state’s attorney general additional powers against price gouging.
Tong mentioned how the state of New York took the lead in looking into price gouging involving egg production during the pandemic and said currently his office does not have the authority to go after businesses if their prices are suspect.
The attorney general also talked about the proposed $24.6 billion Kroger, Albertsons merger, stating “as choices become ever more constricted prices will continue to go up.”
“Every single day [families] are getting squeezed, and our job collectively is to push back on that squeeze and give Connecticut families a little bit of breathing room,” he said.
Senate President Martin Looney said some products in other markets have gone down over the last few months, but that is not the case in grocery.
“This indicates there is a real problem we can’t ignore,” he said.
The problem is more magnified for families of lower incomes. Sen. Patricia Billie Miller said during the press conference that those with Supplemental Nutrition Assistance Program benefits have a limited amount of money for groceries and are being stretched to the ultimate limit. She also talked about her own struggles at the grocery store.
“When I am at the grocery store and trying to eat healthy, I should just get some sugar water and call it a day. It’s getting so expensive,” she said.
However, a recent survey from The Feedback Group says consumers largely blame government policies for high grocery prices. In fact, supermarket retailers ranked fourth behind product manufacturers and suppliers and wars and worldwide political conflicts.
In late March, an FTC report accused large grocery chains of using pandemic-era supply chain disruptions “as an opportunity to further raise prices and increase their profits, which remain elevated today.”
The FTC investigation focused on nine major retailers and CPG companies, including Walmart, Amazon, Kroger, C&S Wholesale Grocers, Associated Wholesale Grocers, McLane Co., Procter & Gamble, Tyson Foods, and Kraft Heinz.
The report found that food and beverage retailers increased their revenue by more than 6% over their total costs in 2021, and in the first three quarters of 2023 retailer revenue climbed further to 7%, “casting doubt on the assertions of some companies that rising prices at the grocery store are the result of retailers’ own rising costs.”
The FTC also claims that some companies, mainly larger ones, imposed strict delivery requirements and threatened fines for failure to deliver, which pressured suppliers to prioritize them over smaller competitors.
Some retailers also engaged in “excessive consolidation,” particularly with private label products, “as firms recognized the risks associated with having few suppliers available.”
