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FTC probes Kroger, Walmart, Amazon & others about supply chain woes as White House explores impact on holiday shopping, brainstorms relief strategies –

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By Elizabeth Crawford contact
30-Nov-2021 – Last updated on 30-Nov-2021 at 17:15 GMT
Related tags: Federal trade commission, Kroger, Amazon, Tyson foods, Walmart, Supply chain
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The probe, approved by a 4-0 vote, was announced the same day President Joe Biden met with CPG industry stakeholders and food retailers to discuss​ the impact of supply chain constrains on their ability to serve consumers. It also comes at a time when consumer demand for packaged goods is rising and manufacturers are increasing prices to offset higher production costs.
Taken together, the moves reflect a dynamic and evolving situation and shine a light on rising concerns about access and consumers’ ability to absorb higher prices.
Over the past 20 months since the pandemic was declared and supply chain struggles became a household topic of conversation, stakeholders have laid the blame for the snarls at the feet of each other while competing to fill orders and gain market share by keeping store shelves stocked with their products.
The FTC probe seeks to untangle the sources of supply chain struggles and evaluate both their impact on competition in the consumer goods and retail market as well as the impact of stakeholders’ actions related to the current condition.
“I am hopeful the FTC’s new 6(b) study will shed light on market conditions and business practices that may have worsened these disruptions or led to asymmetric effects,”​ FTC chair Lina Khan said in a statement​ yesterday.
To do this, the commission is requesting​ internal documents related to the supply chain situation from Walmart,, Kroger, Tyson Foods, Kraft Heinz, C&S Wholesale Grocers, Associated Wholesale Grocers, McLane Co, and Procter & Gamble.

Among the documents requested are those outlining supply chain strategies related to pricing, marketing & promotions; costs, profit margins and sales volumes; selection of suppliers and brands; and market share, according to the FTC.
The agency also seeks insights on how the supply chain issues are affecting competition in the consumer goods market.
Recipients of the orders have 45 days to provide FTC the internal documents.
While the current investigation does not have a specific law enforcement purpose, the information gathered could trigger future specific investigations by FTC or be used to reshape the agency’s enforcement strategy going forward.
The investigation comes at a time when consumer demand for packaged goods is at its highest point since the pandemic began – placing immense pressure on supply chains as retailers and manufacturers strive to keep store shelves stocked.
According to the Consumer Brands Association’s analysis of Bureau of Labor statistics data, CPG demand increased 8.3% in the third-quarter year-over-year and 1.8% over the prior quarter – exceeding for the first time consumer demand in March 2020 when panic-buying led to bare shelves.
CBA doesn’t anticipate demand will ease any time soon as many Americans continue to work from home and are maintaining new habits and shopping patterns established during the pandemic. As such, it projects demand will grow an additional 10-11.5% in the fourth quarter over the same time period last year.
Despite increased demand, store shelves remain stocked, unlike at the start of the pandemic. This reflects industry’s agility and changes to better predict and meet demand, CBA’s CEO and president Geoff Freeman said in a release.
However, he adds, these changes and the sustained higher output are coming with higher supply and production costs – some of which are being passed through to consumers.
According to the Bureau of Labor Statistics, the producer price index, which measures the cost of goods, was 8.6% higher year-over-year in October. While analysis show the PPI falling down after a sharp spike earlier this year, it is still 10.5-12% higher than a year before, according to CBA modeling.
CBA has aggressively lobbied for Congress and the White House to ease supply chain strain that is contributing to higher costs. These include increasing trucking capacity, extending drivers’ hours of service flexibility and creating an ‘air traffic control’ for freight to maximize existing freight capacity.
Earlier this week, the White House gathered corporate executives from across industries, including grocery retailers and packaged food manufacturers, to discuss supply chain challenges and what is needed to keep store shelves stocks and prices accessible for consumers.
During the round table discussion, many executives expressed their optimism for serving consumers during the holidays and the White House’s efforts so far to alleviate supply chain constraints. But they also noted ongoing challenges.
“The pandemic transformed almost every aspect of our business – from the way customers shop for groceries to how food is produced and transported to our shelves. While there have been targeted supply chain issues, the food supply chain remains robust and there is ample product available for our customers on our shelves,”​ Meg Ham, president of Food Lion, said in a statement from the White House yesterday.
She added in a conversation yesterday with President Joe Biden that Food Lion was able to keep shelves stocked despite supply chain constraints by working “very early with our vendor partners to get clear on our forecasts for the business and what we could do together, from a logistical standpoint, to ensure they had the supplies they needed, we had the supplies we needed to get to the customer.”
She added: “It was a great collaboration and partnership.”
Not all industry stakeholders have the same access and leverage with partners, though – an issue at the root of the FTC investigation.
Independent grocers, for example, “unfortunately continue to face competitive disadvantages when sourcing products in short supply,”​ Carlos Castro, CEO of Todos Supermarket and a participant in the roundtable hosted by the White House, said in a statement released by the administration.
With that in mind, he thanked the president for “helping to address the major issues facing retailers and consumers.”
Among actions taken by the White House was the passage of the Infrastructure Investment and Jobs Act, which seeks to alleviate supply chain challenges in part by improving roads and bridges. In addition, this summer, Biden called for a crackdown on consolidation in ocean shipping and freight rail industries.
Tomorrow, Biden is expected to provide additional insights on the supply chain struggles based on his discussion with corporate leaders at this week’s roundtable.
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