The Federal Trade Commission said Monday that it is investigating the causes behind ongoing supply chain disruptions and how they are "causing serious and ongoing hardships for consumers and harming competition in the U.S. economy."
The FTC said it is ordering Walmart, Amazon, Kroger, other large wholesalers and suppliers including Procter & Gamble Co., Tyson Foods and Kraft Heinz Co. “to turn over information to help study causes of empty shelves and sky-high prices.”
Orders also are being sent to C&S Wholesale Grocers, Inc., Associated Wholesale Grocers, Inc. and McLane Co, Inc.
“Supply chain disruptions are upending the provision and delivery of a wide array of goods, ranging from computer chips and medicines to meat and lumber,” FTC Chair Lina M. Khan said in a statement.
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The companies will have 45 days from the date they received the order to respond, the FTC said.
Along with understanding the reasons behind the supply chain disruptions, the FTC’s study will examine “whether supply chain disruptions are leading to specific bottlenecks, shortages, anticompetitive practices, or contributing to rising consumer prices.”
The FTC said the companies are required to “detail the primary factors disrupting their ability to obtain, transport and distribute their products; the impact these disruptions are having in terms of delayed and canceled orders, increased costs and prices; the products, suppliers and inputs most affected; and the steps the companies are taking to alleviate disruptions; and how they allocate products among their stores when they are in short supply.”
Companies also are required to provide the FTC with "internal documents regarding the supply chain disruptions, including strategies related to supply chains; pricing; marketing and promotions; costs, profit margins and sales volumes; selection of suppliers and brands; and market shares."
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The National Grocers Association (NGA), which represents the independent supermarket industry and its wholesalers, said in a statement Tuesday that it was pleased to see the FTC move forward with the study.
“This study is a key first step in promoting competition in the food supply chain,” Chris Jones, NGA senior vice president of government relations and counsel, said in the statement. “It will shine a light on what our members already know: that dominant grocery power buyers are using their size to demand better terms, better prices, and better products from suppliers, leaving their competitors and American consumers to pay the bill.”
Jones said the actions “leave independent grocers short-handed on key products their customers need and force small, independent grocers and their customers to bear a disproportionate burden of surging food price inflation during supply chain crunches.”
Holiday shopping and supply chain
As the holiday season got underway, President Joe Biden tried to reassure shoppers that his administration was working to ease supply chain problems.
Businesses are working to overcome lingering effects of COVID-related shutdowns and now issues arising from the strong recovery that has generated more demand than many ports, manufacturers and retailers can handle.
The president spoke Monday with the CEOs of Best Buy, Food Lion, Samsung, Etsy and Walmart, among companies. The corporate leaders reassured Biden.
“While we’re all concerned about the supply chain, we have more inventory than we did a year ago, and we have the inventory that we need to be able to support the business,” Walmart CEO Doug McMillon said. “And we are seeing progress. The port and transit delays are improving.”
Contributing: Associated Press
This article originally appeared on USA TODAY: Amazon, Walmart, more asked about higher prices, empty shelves by FTC