May 22, 2024

At Hearing, Warren Calls Out Giant Corporations for Hiking Up Food Prices While Raking in Record Profits, Urges Action to Promote Competition and Bring Down Costs

Warren: “(G)iant grocery stores and massive food conglomerates are ripping people off. And they can get away with it because there is not enough competition to keep them in check.”

Opening Remarks (YouTube) | Hearing Livestream

Washington, D.C. — Today, U.S. Senator Elizabeth Warren (D-Mass.), chair of the Senate Banking Subcommittee on Economic Policy, delivered opening remarks on the lack of competition in the food industry and its impact on prices, products, and consumer choice.

Senator Warren, in her opening statement, highlighted that corporate price gouging is to blame for high food prices for American families, noting that corporations kept prices elevated even after the supply chain disruptions from the COVID-19 pandemic eased. 

The full text of Senator Warren’s opening remarks are available below: 

Opening Statement
U.S. Senate Committee on Banking, Housing, and Urban Affairs Subcommittee on Economic Policy: Lowering Food Prices: Combatting Consolidation and Price Gouging
Wednesday, May 22, 2024
As Prepared for Delivery 

This hearing will come to order.

The American people are angry about rising costs.  And they are right to be angry – especially in the grocery aisle.

It’s infuriating to go to the store week after week and see that the pound of chicken breasts that cost $5 last week was marked up to $6 this week, or that loaf of bread that cost $2.99 last week now costs three and a half dollars.

It’s even more frustrating to open up a new box of cereal and think, ‘hm, I could have sworn there were a lot more Cheerios – and a lot less air – in this box the last time.’ Or to notice that a package of spaghetti that used to feed four or five people now only feeds three.

High grocery prices and shrinkflation hurt seniors on fixed incomes, college students struggling to get by, and working families across the country. That’s why we are holding today’s hearing.

Grocery prices skyrocketed during the pandemic, and in many cases they’ve kept going up, even though the pandemic is over. Supply chains have been restored. Food manufacturers’ costs are going down. The millions of Americans who produce, package, and sell our food are back to work.

Food inflation has slowed over the past year, but not fast enough.  In too many places, grocery prices continue to strain family budgets. So what’s going on?  Why did grocery prices go up so much, and why have they stayed high?  

The answer is pretty obvious when you dig in on the numbers: Grocery prices are up because of good old-fashioned corporate price gouging.  And they can gouge consumers on prices because there’s only a small number of companies controlling every level of the food chain. 

In plain English, giant grocery stores and massive food conglomerates are ripping people off. And they can get away with it because there is not enough competition to keep them in check.  

Four big companies – Walmart, Costco, Kroger, and Ahold – the corporate behemoth behind Hannaford, Giant, FoodLion, and Stop & Shop – control over 70% of the grocery market in most major cities. 

Food producers are even more consolidated. A couple of big cereal manufacturers – Kellog’s and General Mills – control nearly 60% of the market. A single company – CalMaine – controls about 20% of the egg market. Four corporations control 85% of the beef industry and 75% of the pork industry.   

Everything you see as you stroll down the grocery aisle – lettuce in Aisle 1, beer in Aisle 5, pretzels and potato chips in Aisle 9, ice cream in the frozen food aisle – is dominated by a handful of Big Food producers.

The pandemic gave these big food conglomerates an excuse to jack up the prices on grocery staples beyond what was necessary to cover increases in their costs from inflation or supply chain disruptions. Now we’re past the market shock of the pandemic. Corporation’s costs are coming down, and their profits are rising. But because of the lack of competition, companies are keeping prices high. 

Meanwhile, conglomerates hit small farmers by charging sky-high prices for fertilizer and seed and by locking farmers into unfair contracts that limit their ability to make a living off their land.

As a result, Big Food is doing great: Kraft-Heinz, which sells everything from Oreos to pasta sauce to coffee, increased its profits by 448% in 2022. Cal-Maine, the largest egg producer in the U.S., increased profits by 718%.  

It’s not simply supply and demand that’s pushing up corporations’ eye-popping profits – it’s greedflation. Those big corporate profits accounted for more than half of the increase in food prices between 2020 and 2021. That creates problems for families at the grocery store, and it reverberates throughout our nation. For most of 2023, corporate profiteering accounted for more than half of inflation economy-wide.

The facts are clear: Massive corporate profits are a big reason why grocery prices have gone up and stayed up. But policymakers don’t have to stand by and watch. We can do something about it. We can rein in these massive food companies and grocery stores and protect competition to lower food prices. And new polling from Data for Progress shows that nearly 70% of Americans – Republicans and Democrats – support the U.S. government doing more to regulate grocery stores and corporate food producers that raise prices to pad profits.   

The Biden Administration recognized that early on and has taken major steps to fight Big Food, greedflation, and help American families. 

Congress can help the administration do even more. 

I appreciate our witnesses joining us today to talk about how we can do that.