Washington, D.C. – The National Grocers Association (NGA) supports the Department of Justice and Federal Trade Commission move to rewrite merger guidelines to curb mergers that enhance anticompetitive buyer power.

In responding to Justice Department and FTC requests for comments on the July 19, 2023 draft update of the merger guidelines, the NGA is applauding the recognition that mergers can create anticompetitive buyer power, but it requests that the final guidelines go a step further. The new rules should directly address the theories of harm that occur when enhanced buyer power is transformed into economic discrimination.

The biggest national grocery chains wield enormous power over food product suppliers, making it virtually impossible for brands to refuse their demands. Small- and mid-sized businesses end up paying more and getting fewer products because the dominant players are allowed to abuse their advantage in the marketplace and gain the upper hand over rivals.

“After decades of unchecked grocery consolidation, large national chains like Kroger and Albertsons are merging arguing they need the additional buyer power to remain successful against the big box and e-commerce giants,” said Chris Jones, NGA senior vice president of government relations and counsel. “The draft updated Merger Guidelines acknowledge the critical issue of buyer-side market power and its potential to undermine competition. In our comments to antitrust enforcers, NGA is reinforcing how constraints on buyer power will protect grocery competition and consumers.”

The NGA is calling on the Justice Department and FTC to balance the economic advantages of mergers with the anticompetitive dangers to the marketplace when dominant firms combine to strengthen their buyer-side market power.

NGA firmly believes that the final guidelines should go beyond addressing these potential harms to suppliers and directly tackle the anticompetitive effects that mergers can have on buyers’ competitors. In today’s grocery industry, dominated by a few national chains, buyer-side market power has been used to dictate terms and conditions to suppliers, thereby discriminating against independent grocers and their customers.

To read NGA’s comments, click here.