FTC extends deadline for public comment on supply chain disruptions

The Federal Trade Commission said Friday it is extending by 30 days the deadline for retailers, consumer goods suppliers, wholesalers and consumers to submit voluntary comments as part of the agency’s inquiry into supply chain disruptions. The new deadline is Feb. 28.

The agency launched the investigation in late November to understand how large companies have used their scale to circumvent supply chain bottlenecks and whether those actions contributed to empty shelves and soaring prices that have hurt competitors and consumers. It ordered nine large retailers, wholesalers and consumer goods suppliers to provide detailed information about transportation and distribution delays, rising shipping costs, alternative logistics measures and how store allocations are managed when there are product shortages. 

The orders were sent to Walmart (NYSE: WMT), Amazon (NASDAQ: AMZN), Kroger (NYSE: KR), C&S Wholesale Grocers, Associated Wholesale Grocers, McLane Co., Procter & Gamble (NYSE: PG), Tyson Foods (NYSE: TSN) and Kraft Heinz (NASDAQ: KHC). Submissions were due in mid-January.

The FTC’s move has raised questions about its ultimate purpose since supply chain disruptions are a function of unusual demand and production patterns, as well as labor reductions, triggered by the pandemic. Bottlenecks are especially noticeable at major container ports and the transportation network that connects them to consumer markets, but the primary agency for ensuring fair competition in the ocean shipping industry is the Federal Maritime Commission.

Some Washington observers say the FTC’s study fits with the Biden administration’s interest in reducing the dominant market position of large corporations to even the playing field for other competitors. The White House is pointing to the 5.8% increase in consumer inflation last year as evidence that big business is taking advantage of supply constraints to hike prices. 

Critics say there weren’t accusations of price gouging before the pandemic and that the FMC should focus on ocean carrier rate hikes, late fees for container pickup and returns, and refusing to make enough containers available for exporters so they can be quickly returned to Asia for more lucrative import cargo. 

The FTC is soliciting comments from other stakeholders on how supply chain problems are affecting competition in consumer goods markets. 

Some groups are using the FTC review to raise long-standing supplier issues that predate the pandemic.

Convenience store operators, for example, accused packaged beverage companies of violating antitrust laws by charging convenience retailers higher wholesale prices than grocery, dollar or big box stores and not making certain package sizes available to them.

Family Express, a company with more than 80 convenience stores in Indiana, said in a letter to the FTC that efforts to find alternative suppliers or even pay retail prices at big box stores that can be lower than its wholesale costs “have been thwarted by the package beverage companies by either threatening to cut off our company or cut off the big box store if they allow such purchases.” 

The pricing and supply discrimination raises prices for consumers and results in out-of-stock products such as soda, energy and sports drinks, and bottled water, the National Association of Convenience Stores, complained. The unavailability of workers at bottling plants and lack of drivers to deliver products during the pandemic have increased the amount of empty shelf space, it said.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

Write to Eric at ekulisch@freightwaves.com

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Source: https://www.freightwaves.com/news
Editor: Eric Kulisch, Air Cargo Editor