Yesterday, December 1, 2022, RAFI-USA was proud to join the Open Markets Institute, HEAL Food Alliance, National Farmers Union, National Family Farm Coalition, and other partners in calling on the FTC to oppose the proposed merger of grocery chains Kroger and Albertsons. If allowed to proceed, this merger would forge Kroger into a grocery mega-chain rivaled only by Walmart, and dramatically increase the concentrated power of a few corporations over our country’s food retail markets.
In our conversations with the farmers and food supply chain stakeholders in our network, we are hearing about continued predatory pricing pressure causing producers — and especially organic growers — to lose wholesale contracts, even in the midst of unprecedented inflation,” Aaron Johnson, RAFI-USA’s Challenging Corporate Power program manager says. “Further consolidation within grocery retail markets will only exacerbate the monopsonistic buyer power that enables this pressure.”
Grocery stores, institutional, and other wholesale distributors have, at their best, a vital role to play in the health and scaling potential of resilient, diverse, and cooperative regional food economies. In their absence, farms, cooperatives, processors, and value-added food brands are left to compete for a slice of the food market too slim to viably support the resilient food economies we need. Food distribution firms with outsized market dominance are able to leverage exclusive dealing arrangements, predatory pricing, preferential discounts and rebates, and their monopsony power to narrowly restrict the market slice of food purchasing dollars available to their locally and regionally scaled competition, functionally placing a low ceiling on their ability to scale and thrive. As such, it is our belief that aggressive and comprehensive government antitrust and fair competition enforcement is needed to restore the economic preconditions necessary for the growth of resilient regional food economies.