by Jamil Ragland CTNewsJunkie
Attorney General William Tong announces an inquiry into potential price gouging by grocery retailers on Thursday, April 11, 2024, at the Legislative Office Building in Hartford. Credit: Jamil Ragland / CTNewsJunkie
HARTFORD, CT – Attorney General William Tong, flanked by the Democratic Senate leadership, announced on Thursday that he was opening an inquiry into potential price gouging practices by Connecticut grocery stores.
The decision to launch the inquiry was inspired by a report published by the Federal Trade Commission that found that grocery chains across the nation used the COVID-19 pandemic “as an opportunity to further raise prices and increase their profits, which remain elevated today.”
“Grocery stores have made a mess on aisle five, and we need the Attorney General to help us clean it up,” said Senate Majority Leader Sen. Bob Duff, D-Norwalk.
Republicans in the General Assembly responded to the news conference by blaming high grocery prices on President Joe Biden and Connecticut’s Democratic Party.
The FTC report noted that grocery chains have increased their profit margins while blaming price increases on pandemic-related supply chain issues. For example, revenue for food and drink retailers increased to more than 6% over costs in 2021, higher than the most recent peak of 5.6% in 2015. In the first three quarters of 2023, revenue over costs increased even more, to 7%. The report also stated that up to 50% of the inflation affecting food prices may be the result of price gouging.
“This data casts doubt on assertions that rising prices at the grocery store are simply moving in lockstep with retailers’ own rising costs due to inflation,” Duff said.
Connecticut has laws that make price gouging illegal in the case of crisis declarations for goods and services. These laws typically apply to the aftermath of storms and other emergency events.
“We’re here today to announce the state of Connecticut is conducting an inquiry into grocery and food prices at our state supermarkets, with a focus on trying to determine whether or not food prices and grocery prices on everyday groceries are unreasonably, excessively, and unlawfully high,” said Tong.
The inquiry will begin with the attorney general’s office sending letters to the grocery retailers across the state. Asking them to detail their costs and revenue to determine if price gouging is taking place. Further questions and inquiries will follow as necessary, Tong said.
Duff also announced that Senate Democrats will seek to make an amendment to Senate Bill 3, to give the attorney general’s office more authority to go after food producers and other potential price gougers higher up the supply chain. Currently, the attorney general can only enforce the price gouging law against grocery retailers in the state.
“Right now there are limited powers for the attorney general during emergencies and certain other times. But we want to be able to expand that so [Tong] has the authority and the ability to look at this a little more deeply, and has the authority to get to the bottom of the causes of some of these issues,” Duff said.
According to the U.S. Department of Agriculture, food prices increased by 25% from 2019 through 2023. In 2022, the price of food increased 9.9%, the largest single-year increase since 1979.
“Every single day people in Connecticut, families, are getting squeezed by the cost of utilities, by the cost of internet, by the cost of smartphones and devices, by the cost of medicine, medication, gasoline, rent, food,” said Tong.”Our job collectively is to push back on that squeeze and to give Connecticut families just a little bit of breathing room so they can provide for their kids, so they can raise a family.”
In a statement released this afternoon, Senate Republican Leader Stephen Harding and House Republican Leader Vincent Candelora described the FTC’s study that Democrats cited earlier as “flimsy.”
“Soaring food prices are crushing families nationwide and here in Connecticut, where Democrats are using a flimsy study to gaslight frustrated residents by trying to shift blame away from the Biden administration’s failures to get inflation under control. Grocery stores are critical partners in our local and state economies, employing thousands of people here despite an ever-changing – and costly – regulatory environment. Instead of this transparent PR stunt, Democrats should look in the mirror and face the reality that their decisions, coupled with Bidenomics, have compounded the financial stress faced by residents who are tired of paying an arm and a leg for a bag of chips.”
“It is hypocritical for Connecticut Democrats to be talking about how unaffordable groceries are. Democrat-supported policies have repeatedly driven up the cost of everything in Connecticut. They are responsible for the crisis. Just a few examples include the Democrat-backed truck tax, the Democrat-backed meals tax, their anti-business and anti-consumer government mandates, and the upcoming Democrat-supported 4.5% annual pay increases to state union employees that will be baked into all of our taxes. People feel the pain of our unaffordable Connecticut and they know a political stunt when they see it. We saw that clearly today and we invite Democrats to continue these photo ops which show just how out of touch they are.”
According to the Bureau of Labor Statistics, the combined effects of increased demand for durables and shortages caused by pandemic-related supply-chain disruptions were the main source of inflation in the second quarter of 2021. Both the direct and indirect effects of those supply-chain problems remained substantial through the end of 2022.
According to the bureau’s data, food price inflation peaked at 11.2% in September 2022 but had dropped back down to 2.2% in March.