Washington, D.C. – The National Grocers Association (NGA), the leading trade association for the nation’s independent community grocers and wholesalers, and an original plaintiff in this case when it was first filed in 2005, has serious concerns about the proposed Visa and Mastercard class action settlement. While we are reviewing the text of the proposal filed today, we are concerned the revised deal fails to address the underlying problem of anticompetitive price-setting in the credit card industry.
This settlement only offers small, temporary reductions in swipe fees and limited rule changes while preserving the centralized system that allows the duopoly of Visa and Mastercard to dictate fees across the entire economy, eliminating incentives for competition and preventing merchants from negotiating lower fees. As a result, small businesses and consumers will continue to pay the price, with the expense of card acceptance built into every grocery bill, whether a shopper uses a card or not.
“Independent grocers, operating on net margins of less than 2%, have been hit hardest by rising swipe fees, which grow faster than inflation and cost consumers and businesses over $100 billion annually,” said Chris Jones, NGA chief government relations officer and counsel. “This settlement leaves Visa and Mastercard’s price-fixing structure fully intact, to the detriment of Main Street businesses and Americans everywhere.”
NGA continues to advocate for meaningful reform that introduces genuine competition and lowers costs for both merchants and consumers. True, meaningful progress will come from ending what is effectively the price-fixing of interchange fees, and from Congress reintroducing and passing the bipartisan Credit Card Competition Act, which would foster issuer-level competition and give retailers an actual choice in how payments are routed and processed.
“Independent grocers and their customers deserve genuine reform, not short-term concessions,” Jones said. “NGA has been at the forefront of this issue for over two decades, and we will always oppose weak settlements like this that fail to restore fair competition and deliver real relief for community grocers and working families.”
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About the National Grocers Association
NGA is the national trade association representing the retail and wholesale community grocers that comprise the independent sector of the food distribution industry. An independent retailer is a privately owned or controlled food retail company operating a variety of formats. The independent grocery sector is accountable for about 1.2 percent of the nation’s overall economy and is responsible for generating more than $250 billion in sales, 1.1 million jobs, $39 billion in wages and $36 billion in taxes. NGA members include retail and wholesale grocers located in every congressional district across the country, as well as state grocers’ associations, manufacturers and service suppliers. For more information about NGA, visit www.nationalgrocers.org.
