Thursday, February 8, 2007
Are You Paying Too Much for Vegetables and Cereal? Congress to Explore Competition Issues in the Grocery Industry
Posted by D. Daniel Sokol
Democratic control of Congress has prompted new committee chairs to flex their legislative muscles. The latest to do so is Dennis Kucinich (D-Ohio), chairman of the new House Oversight and Government Reform Domestic Policy Subcommittee. Kucinich, a declared presidential candidate for the 2008 race, has vowed to investigate the cost of groceries and competition in the marketplace, according to today's BNA Antitrust Report (subscription required). Is this motivated by Albertson/Supervalu, industry consolidation generally or another forum to politicize WalMart (always a good move for someone running for president), the nation's top grocer?
Hat tip to Minnesota's Tom Cotter from bringing the story to our attention.
February 9 Update
My colleague Kyle Stiegert who heads the University of Wisconsin's Food System Research Group in the Agricultural and Applied Economics Department alerted me to an issue sheet he wrote recently on supermarket mergers and supercenters on prices. His conclusion is that "[r]ecent changes in the industry have muted competition effects. The rise of supercenters does not seem to increase competition nor have a significant impact on prices. Supermarket mergers increase supermarket profits, but prices to consumers also rise."