skip to Main Content

Are CT grocery stores ‘price gouging’? AG Tong launches inquiry

DOES ANYONE THINK THAT A 6 OR 7 PERCENT PROFIT MARGIN (I BELIEVE THAT’S 6 OR 7 CENTS ON THE DOLLAR FOLKS) BY GROCERY STORES IS PRICE GOUGING?  I DON’T, BUT THEN AGAIN AFTER SPENDING 28 YEARS IN THE CONSUMER PRODUCTS MANUFACTURING SECTOR WHERE OUR PRIMARY CUSTOMERS WERE GROCERY STORES, WHAT DO I KNOW? 

 IT APPEARS, HOWEVER, THAT OUR ESTEEMEED SENATORS DUFF AND LOONEY AS WELL AS AG TONG THINK THEY KNOW MORE ABOUT THE GROCERY BUSINESS THAN THE FOLKS WHO ACTUALLY OPERATE WITHIN THE GROCERY SUPPLY CHAIN.

LET’S TAKE A LOOK AT A FEW THINGS THAT MIGHT BE CONTRIBUTING TO THE HIGH COST OF EVERYTHING THAT WE BUY AT THE GROCERY STORE.

IN THE TAX FOUNDATION’S BUSINESS TAX INDEX REPORT, CONNECTICUT WAS RANKED IN 47TH PLACE (FOLLOWED ONLY BY CALIFORNIA, NEW YORK AND NEW JERSEY).  CONNECTICUT WAS ALSO RANKED IN 47TH PLACE FOR PERSONAL INCOME TAXES AND IN 50TH PLACE FOR PROPERTY TAXES.

EVERYTHING WE BUY AT THE GROCERY STORE IS DELIVERED BY TRUCKS.  THE CURRENT DIESEL FUEL TAX IN CONNECTICUT IS 49.1 CENTS PER GALLON (WHEN THE FEDERAL EXCISE TAX IS ADDED, IT’S 73.6 CENTS A GALLON).  THE CURRENT COST OF DIESEL IN CONNECTICUT IS $5.47 PER GALLON (THE NATIONAL AVERAGE IS $5.18).   CONNECTICUT ALSO IMPOSED A MILAGE TAX ON COMMERCIAL VEHICHES IN 2021 WHICH IS EXPECTED TO COST THE CARRIERS $90 MILLION THIS YEAR.

CONNECTICUT’S CURRENT MINIMUM WAGE IS $15.69 PER HOUR, WHICH IS THE 4TH HIGHEST IN THE NATION.  ONLY THE DISTRICT OF COLUMBIA, WASHINGTON STATE AND CALIFORNIA ARE HIGHER.

AS USUAL, OUR FEARLESS LEADERS LIKE TO BLAME THE SUPPLY CHAIN DISRUPTIONS CAUSED BY THE PANDEMIC NEARLY FOUR YEARS AGO.  ACCORDING TO THE UNITED STATES DEPARTMENT OF AGRICULTURE ECONOMIC RESEARCH SERVICE, HOWEVER, NEARLY 90 PERCENT OF US CONSUMER FOOD AND BEVERAGE SPENDING IS FOR DOMISTICALLY PRODUCED PRODUCTS.  DURING THE PANDEMIC, FOOD AND BEVERAGE PROCUCTION AND TRANSPORTATION WERE DESIGNATED AS ESSENTIAL INDUSTRIES AND WERE NOT IMPACTED BY ANY OF THE SHUT DOWN MANDATES DURING THAT PERIOD.  THIS CLAIM IS SIMPLY BOGUS.

SO WHAT’S DRIVING INFLATION?  WITH THE NATIONAL DEBT AT MORE THAN $34 TRILLION; ANNUAL DEBT SERVICE OF NEALY A TRILLION (WHICH IS MORE THAN OUR ENTIRE DEFENSE BUDGET); UNCONTROLLED GOVERNMENT SPENDING (AT ALL LEVELS OF GOVERNMENT); UNLIMINTED SUBSIDIES FOR THE CLIMATE CULT; UNFUNDED PENSION LIABILITIES AT THE STATE LEVEL; ETC., ETC., ETC., ETC., ETC., TAKE YOUR PICK.  ONE THING THAT IS NOT INVOLVED, HOWEVER, IS YOUR GROCERY STORE.

-John Miller

Are CT grocery stores ‘price gouging’? AG Tong launches inquiry

FTC report on major grocery retailer profits prompts CT Dems to seek expanded AG authority to investigate entire food supply chain

A man shops in a West Hartford grocery store on Thursday.

FTC report on major grocery retailer profits prompts CT Dems to seek expanded AG authority to investigate entire food supply chain

Attorney General Tong announced plans to investigate major grocery retailers to disclose profits and costs following a report suggesting that increased prices are not solely due to inflation.

Connecticut Attorney General William Tong announced his office is seeking detailed cost and profit information from retail grocers in the state in an effort to determine whether their business practices are partly to blame for persistent elevated prices of food staples.

The announcement Thursday came just a day after the U.S. Bureau of Labor Statistics reported another month of stubbornly high inflation — with prices rising 3.5% from the same period last year.

“Every single day, people in Connecticut, families are getting squeezed,” Tong said. “Our job, collectively, is to push back on that squeeze and to give Connecticut families just a little bit of breathing room.”

Tong said he was prompted to pursue the inquiry after a Federal Trade Commission report, released last month, found that major grocery chain profits “rose and remain elevated” in the wake of pandemic-induced disruptions to food supply chains — even after those disruptions appeared to have eased.

In 2021, revenues were more than 6% higher than costs among the food and beverage retailers FTC studied. And for the first three quarters of 2023, as inflation began to ease, those retailers’ profits reached 7%, the report found.

“This casts doubt on assertions that rising prices at the grocery store are simply moving in lockstep with retailers’ own rising costs,” the report reads. FTC recommended “further inquiry” by policymakers into grocery chains’ business practices.

Connecticut’s Democratic party leaders are heeding that call. The attorney general’s office will begin sending out letters of inquiry to grocery retailers in the coming days.

But food businesses in Connecticut said state officials should be careful how they assign the blame for higher prices.

In an emailed statement, Wayne Pesce, president of the Connecticut Food Association — a trade group representing food retailers, wholesalers, distributors and other businesses — said inflation has shown up in many industries, from housing and health care to energy and transportation. “Will these industries be asked to report profits?” he asked.

Pesce went on to point out that the FTC study was focused on markets distinct from those where Connecticut food retailers operate.

“Since the study did not directly investigate the operations of grocery retailers in Connecticut, applying its findings to justify profit reporting requirements for local businesses is not appropriate,” Pesce wrote. “Every market has its unique dynamics, and extrapolating conclusions from a study conducted on national retailers could lead to misconceptions and unfair burdens on Connecticut businesses.”

State Senate leaders see it differently.

“This additional study is imperative to understanding the rising prices of groceries and how we can protect consumers from any price gouging,” Senate Majority Leader Bob Duff, D-Norwalk, said at Thursday’s press conference.

Duff, along with Senate President Pro Tem Martin M. Looney, D-New Haven, said they also plan to seek expanded authority for the attorney general to investigate profiteering throughout the food supply chain, from distributors to producers. (Currently, Tong’s authority to conduct such inquiries only extends to retailers.) The expansion will be proposed as an amendment to Senate Bill 3, which calls for several changes to consumer protection laws, Democratic leaders said.

“There seems to be some indication that the price of groceries has stayed artificially high in the wake of [the pandemic] even though the crisis justification for it has passed,” Looney said. “So it’s another case of corporate opportunism to add to profits at a time when it’s really not justified.”

Republican state leaders responded to the proposal Thursday with skepticism, instead laying the blame for high prices — which they termed ‘Bidenflation’ — on Democratic party policies.

“They’re being a little disingenuous if they don’t think they have a part in what’s going on,” said Rep. Dave Rutigliano, R-Trumbull. Policies like the highway use tax and annual increases in the statewide minimum wage add up for businesses on top of Connecticut’s relatively high energy and other costs, Rutigliano said.

“Government absolutely has a major responsibility for the high prices that we pay for everything,” he said.

This Post Has 0 Comments

Leave a Reply

Your email address will not be published. Required fields are marked *