Kamala Harris promises federal ban on “price-gouging” and penalties for “opportunistic companies” in food industry

21 Aug 2024 --- US Vice President Kamala Harris has outlined plans to implement a federal ban on “price gouging” in the food and grocery industry and ensure there is more competition. The news follows Mars’ recent announcement that it plans to buy snack maker Kellanova in a mega US$36 billion deal, which could come under heightened regulatory scrutiny if Harris is elected president in November.

In her first speech focused on economic policy, she said she will go after “the bad actors” to pass the “first ever federal ban on price gouging on food.”

“I will work to pass the first-ever federal ban on price gouging on food. My plans will include new penalties for opportunistic companies that exploit crises and break the rules, and we will support smaller food businesses that are trying to play by the rules and get ahead,” she told the rally in North Carolina, US.

 “We will help the food industry become more competitive because I believe competition is the lifeblood of our economy. More competition means lower prices for you and your families.”

High food prices

Harris also explained that prices went up during the COVID-19 pandemic when supply chains shut down, and even though supply chains have now improved, prices still remain too high.

“A loaf of bread costs 50% more today than it did before the pandemic. Ground beef is up almost 50%. Many of the big food companies are seeing their highest profits in two decades, and while many grocery chains pass along these savings, others still aren’t,” she added. 

Harris’ plans could see the US government scrutinize deals like the Mars and Kellanova merger, which is still to be approved by competition authorities and is the largest acquisition in the F&B industry of 2024 so far. Competition concerns have been raised due to fears that Mars would hold half of all US snack and cereal bar sales post-acquisition.

Reacting to Harris’ plans to tighten price regulations, food groups have said the US government needs to stop using the industry “as a scapegoat.”

Burdensome regulations

Gary Kushner, interim president of the National Chicken Council, says many Americans are seeing inflation in nearly every part of their livelihoods, such as rent, gas, and cars, not just food.  

Harris says many food companies are seeing their highest profits in two decades, while consumers are being hit with high prices. “Chicken prices are largely affected by supply and demand, by major input costs like corn, soybeans, energy, packaging, transportation, and by fiscal policy and burdensome government regulations. Not price gouging,” he stresses. 

“It’s time for this administration to stop using the meat and poultry industry as a scapegoat and a distraction for the root causes of inflation and the significant challenges facing our economy.”

Meanwhile, the Meat Institute says food prices continue to come down from the highs of the pandemic and issues such as avian influenza, which affects dairy cattle and the US government has taken preventative measures against. A shortage of beef cattle and high input prices like energy and labor are also all factors that determine meat prices. 

Julie Anna Potts, president and CEO of the organization, says: “Prices that livestock producers receive for their animals are also heavily influenced by supply and demand. Prices for cattle producers especially are at record highs, surpassing the 2014-2015 previous record highs.”

“Today, well into 2024, cattle prices remain at record levels because the US has the lowest cattle inventory since Harry Truman was President.”

US grocery prices remain high compared to pre-pandemic levels. However, last month they only increased 1.1% compared to the previous year, showing signs of stabilization. 

By Sade Laja