DOJ, FTC Deliver on NGA's Call for Enhanced Scrutiny of Mergers
The National Grocers Association (NGA) is expressing its support for the final version of new merger enforcement guidelines released by the Federal Trade Commission (FTC) and Department of Justice (DOJ). The final guidelines include significant revisions to the existing standards, adding new considerations for mergers that enhance buyer power. In a major shift, the guidelines now strongly consider how buyer power affects competition among rival firms and trading partners, while the current guidelines largely overlook how buyer power abuses affect competition.
These updates reflect an effort to address concerns raised by the NGA with federal enforcers. This past September, in comments submitted to the FTC and DOJ regarding the proposed guidelines, the NGA stressed the need for the agencies to scrutinize how dominant firms use their bargaining leverage to impose discriminatory terms on rivals. NGA emphasized the huge advantage enjoyed by dominant food retailers, which can place pressure on grocery suppliers to obtain better terms in such areas as pricing, promotions, payment terms and product availability.
[Read more: "How Small and Regional Grocers Can Compete With Big-Box Retailers"]
“Following decades of consolidation, the current grocery landscape is dominated by a few national chains who wield so much economic influence they can undercut competitors simply by demanding preferable treatment from suppliers,” noted Chris Jones, SVP of government relations and counsel at Washington, D.C.-based NGA, the national trade association representing the retail and wholesale grocers comprising the independent sector of the food distribution industry. “This pattern has resulted in anticompetitive economic discrimination against independent grocers and their customer base. The revised Merger Guidelines [signify] a major course correction in antitrust enforcement that recognizes the competitive dangers of buyer power.”
Back in July, Jones observed that the issue “has been laid bare by pandemic-era supply chain disruptions and increasing food price inflation where independent grocers have been put at critical disadvantage relative to their dominant competitors, especially those who serve rural and urban communities.”
