You're Probably Getting Screwed by Grocery Prices
What we've learned about Trump's antitrust approach.
Will the Trump presidency usher in lower grocery prices? Last weekend the president-elect went on Meet the Press and said “When you buy apples, when you buy bacon, when you buy eggs, they would double and triple the price over a short period of time, and I won an election based on that.” Trump added that his administration will bring those prices “way down.”
Just several days later, Trump hedged his bets a bit in an interview with Time where he said “It's hard to bring things down once they're up.”
Trump is right about the problem. Food prices are up 25% since 2020, a key part of the cost-of-living increases that fueled the anger and frustration many voters took to the polls in 2024. Inflation was a key concern of voters and sticker shock at the grocery store was one of the places everyday people feel this squeeze the most. Furthermore, those price increases were driven by corporate monopolies with massive pricing power, such as the handful of companies that dominate egg processing. Will Trump bring prices “way down” though? The individuals he has appointed to key antitrust enforcement positions give some clues.
On Tuesday Trump announced he had selected Andrew Ferguson, one of the two Republicans serving on the Federal Trade Commission (FTC), as the next chair of the FTC. Ferguson will replace current Chair Lina Khan whose term expired several months ago. Ferguson has been jockeying for the role, even creating a campaign-style one-pager that laid out his vision for the role. This included a pledge to “Stop Lina Khan’s war on mergers” because “most mergers benefit Americans.” Ferguson might consider taking some time to read the 35,000 public comments that people across the country submitted to the FTC when they were considering new merger guidelines. I’m not sure they feel like most mergers are benefiting them.
Ironically enough just hours before Trump announced Ferguson was his pick for FTC chair, the FTC won its lawsuit seeking to block the $24 billion grocery mega-merger between Kroger and Albertsons (the largest proposed grocery merger ever) because the combination would have reduced competition and raised prices. The judge in the case also became the first to cite the new merger guidelines adopted last year by the FTC and the Department of Justice. Those new tougher guidelines were spearheaded by Khan and Assistant Attorney General for Antitrust Jonathan Kanter.
Ferguson, who has worked for Supreme Court Justice Clarence Thomas and Senator Mitch McConnell, seems likely to continue efforts to reign in Big Tech companies, even if mostly under the banner of preventing “woke” corporations from censoring speech. But between the one-pager he released and prior remarks and speeches, it seems clear that Ferguson will reverse course on Khan’s broader agenda, including on grocery prices.
In addition to more aggressively policing mergers, Khan serves as co-chair of President Biden’s Strike Force on Unfair and Illegal Pricing and announced earlier this year she would be launching an inquiry specifically into grocery prices. Under Khan the FTC has also studied the way retail giants like Wal-Mart exploited the COVID-19 pandemic to the detriment of smaller competitors.
Ferguson was not the only important antitrust choice Trump has made recently. In addition to Ferguson, Trump announced that Mark Meador will take Ferguson’s place on the commission and last week tapped Gail Slater to head the Antitrust Division at the Department of Justice in place of Kanter. Meador should be a strong enforcer, particularly in regards to the Robinson-Patman Act (RPA) a New Deal-era law meant to protect small businesses. Meador has written that the abandonment of this law in recent decades is lawless and harms consumers. Meador’s statements took on added importance this week as the FTC filed the first RPA lawsuit in over two decades and it takes a majority on the FTC to end a lawsuit.
Slater, who served as an aid to Vice President-elect JD Vance, like Ferguson is also considered to be skeptical of Big Tech but it is less clear how she views the broader approach Kanter has taken to addressing monopoly power, particularly as it relates to grocery prices. For example, the DOJ has sued Agri Stats for using detailed data it collects on farmers and ranchers to enable price-fixing by major meat processors, increasing the cost on consumers. Kanter also prevented a merger between Fresh Express and Dole - two of the three major packaged salad companies - that would have reduced choices and raised grocery prices on consumers.
The Biden Administration’s approach to the powerful corporations that drove much of the inflation in recent years was hardly perfect, but if Trump’s approach is to weaken enforcement we are going in the wrong direction and your groceries will not be getting more affordable anytime soon. If anything, the lesson for Trump is that current enforcers could have been more aggressive, not less. A recent article by Tara Pincock at the the Open Markets Institute recently argued for a stronger approach to price fixing by making the point that like robbing a bank, price fixing is a criminal act and should be punished as such.
If Trump wants to keep Americans from getting screwed by high prices at the grocery store, his antitrust enforcers should double down on the work their predecessors have started.
YOU’RE PROBABLY (ALSO) GETTING SCREWED BY:
Sports Gambling
In a letter dated Dec. 5, Republican Senator Mike Lee and Democratic Senator Peter Welch asked for an investigation following reports that the two companies were allegedly acting together to pressure businesses not to engage with competitors.
Billionaires
Wealth is about to rule…
The United State of Blackstone
Here’s how private equity firms are coming for mom and pop businesses!
British Private Equity Firm Owning the Democratic Party’s Data
In a follow up to our post last week, Move On is moving on… “The leaders of the giant online mobilization group MoveOn have told me that after a careful review, they’ve decided to end their longstanding reliance on ActionKit and embark on a new partnership with the non-profit movement tech platform Action Network (AN). As part of this shift, MoveOn—which boasts more than 10 million members on email and text--will be joining AN’s Product Development Committee (PDC), which currently includes the AFL-CIO, Canada’s Central Labor Committee, the Democratic Legislative Campaign Committee and DailyKos.”
Wealthy Americans Not Paying Taxes
Tens of thousands of wealthy Americans have not filed tax returns in recent years, and many are not complying with IRS efforts to get them to do so.
SOME GOOD NEWS
Small Biz Webinar
A shameless plug for a webinar I’m participating in with Small Business Majority on Monday to discuss the impact of monopoly power on small businesses. Minnesota Amy Klobuchar will be speaking as well! You can register at this link.
Antimonopoly in the States
Both JD and I are strong believers in the power of state-level policy to help address our monopoly crisis. The Institute for Local Self Reliance and the State Innovation Exchange are hosting a virtual event next month on how states can take on monopoly power in 2025. You can register at this link.
BEFORE YOU GO
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Break ‘Em Up,
Justin Stofferahn
This newsletter is worth your time.