Food suppliers blame inflation for price increases. Lawmakers say they are padding the bill.

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Government levers are poised to step up against excessive food price inflation, which the Biden-Harris administration and its congressional allies say is in part the result of overconcentration and a lack of competition in the food and food supply chain.

With inflation at its highest level in nearly 40 years, American families are faced with higher prices at the checkout and are content with leaner meals. Once deemed essential, grocery store workers now say they feel expendable and have only been rewarded with marginal wage increases that they say leave them unable to meet their own growing food costs.

Meanwhile, growers and grocers are exploiting the pandemic to raise prices more than necessary to pass the rising costs on to consumers, Senator Elizabeth Warren, D-Mass. Lambasted in a new letter to the chief of Kroger, the largest grocery store in the country. channel, and shared with NBC News.

“Your business, and the other major grocers who reaped the benefits of a turbulent 2020, appear to pass the costs on to consumers to preserve your pandemic earnings, and even take advantage of inflation to add heavier burdens,” he said. writes Warren.

In 2020, supermarkets saw sales increase 11% from the previous year, to an average of $ 63 billion per month, according to the Census Bureau’s monthly retail report. This is a trend that continued in 2021.

But instead of reinvesting record profits to raise wages and improve working conditions, these companies have launched share buybacks and increased executive compensation, the letter notes.

In June 2021, Kroger announced a billion dollar share buyback program, in late 2002 Albertsons a $ 300 million share buyback program, and Publix increased its quarterly dividends in the first nine months. 2021 of more than $ 70 million.

“Your companies had a choice: they could have kept prices lower for consumers and properly protected and compensated their workers, or made massive payments to senior executives and investors,” Warren wrote to Rodney McMullen, chief executive officer. by Kroger. “It’s disappointing that you have chosen not to put your customers and your workers first. “

Kroger did not immediately respond to an NBC News request for comment.

Supply chain grunts, labor shortages, spurts and shifts in consumer demand have strained production and distribution channels over the past 18 months, driving up costs for producers and retailers. But critics accuse it of having also created an opportunity.

“The real culprits of the cash price hikes are private extractive players who have created advanced supply chains ill-equipped to handle fluctuations in demand,” said Rakeen Mabud, chief policy officer and economist in leader at Groundwork Collaborative, a Washington, DC-based progressive think tank. The group advocated for policymakers to use their tools to intervene, such as enforcement action, taxation, competitive investments, increasing labor rights and relaxing antitrust laws to bring down prices.

The argument is that if there was stronger competition then any retailer who tried to raise prices above costs would lose business to cheaper competitors.

The White House says it is using the tools at its disposal to “crack down on some of the bad behavior,” citing “a lot of evidence” that meat processors, who sit between farmers and grocery retailers, “are enforcing increases prices that are well above the costs they incur “due to inflation, according to a senior White House official.

“The antitrust law provides remedies to prevent extreme concentration or abuse of market power,” said Bharat Ramamurti, deputy director of the National Economic Council. One thing the administration can and has done is “appoint people who intend to enforce antitrust laws rigorously,” he said, noting that pricing investigations had been carried out in similar cases in the past.

This week, President Joe Biden called for hearings to investigate the meat industry, which has seen extreme price hikes during the pandemic.

“I urge Congress to hold hearings on the concentration of power in the few hands controlling the food processing side of the equation,” he said Tuesday in an interview with local WHIO-TV broadcaster. Dayton, Ohio.

The administration has already taken several steps to start tackling concentration in the meat packaging industry, such as stricter enforcement of the Packers and Stockyard Act, which establishes fair competition and business practices on livestock, meat and poultry markets; price reports from beef processors; and providing subsidies to small processors to increase their capacity.

Leading beef processor Cargill has denied that the White House claims there is not enough competition in the market.

“It’s a supply and demand driven market, and so to suggest that there is manipulation or an advantage, I just don’t agree with that,” CEO Dave MacLennan told Bloomberg this week.

At the end of November, the Federal Trade Commission announced a major investigation of the grocery industry, asking nine key players to provide “detailed information to help the FTC shed light on the causes of the ongoing disruption in the chain. supply and how these disruptions cause serious and ongoing hardship. for consumers and hurt competition in the US economy. The agency sent the orders to Walmart, Amazon, Kroger, C&S Wholesale Grocers, Associated Wholesale Grocers, McLane Co., Procter & Gamble, Tyson Foods and Kraft Heinz.

The alleged anti-competitive behavior of large supermarkets has also increased the cost of gasoline and extended journey times for customers who have to drive further to get essential and sometimes hard-to-find items like paper products and meat. “Power shoppers” have moved away from small stores, local and regional grocers complained in a recent FTC public hearing.

Members of the National Grocers Association, an industry trade group, say the big chains have indeed accumulated hard-to-find items, demanding that manufacturers and wholesalers supply them first. Small stores must accept smaller allowances, if any.

Jimmy Wright, president of Wright’s Market, an independent grocer in Opelika, Alabama, told NBC News that although his business doubled overnight when the pandemic struck, he struggled to keep articles on them. shelves.

It always ends up at the back of the pack when items are scarce, he said. As the big chains get their orders, Wright says he only gets a small allowance. And when the shortages are such that the big chains only get smaller allocations, then their orders are not fulfilled.

When Mason jars became a hot item with consumers who dabbled in canning during the pandemic, his supplier sent him a letter telling him that due to “unprecedented levels of demand,” they were using it. would cut for five months “to allow our production team to build up inventory.”

But Wright said as he walked into a large retailer across town, he saw the jars were presented in a prominent, hooded display.

“Power buyers have so much influence over manufacturers, and small retailers like me can’t get ahead,” Wright said.

“There’s nothing more disappointing for me than in the midst of this crisis, when you’re always the first to take care of the community, to look people in the face and say that I can’t help you because that I did not produce in store.

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