In March, Rhode Island joined a growing list of states, including New York, Minnesota, and California, among others, in attempting to amend their laws to better take on abuses of corporate power. Rhode Island lawmakers introduced new legislation to address the growing issue of unfair discrimination within the grocery industry. House Bill 5552, “Protecting Rhode Islanders From Coercive Economic Tactics at Grocery Stores,” tackles price and access discrimination by large grocery and retail chains. Mega-retailers, like Walmart and Stop & Shop, leverage their market power over suppliers to get lower prices, better payment terms, special package sizes or advertising allowances than independent grocers, putting them at an unfair advantage to compete. Senior Researcher and Policy Advocate Ron Knox submitted a memo supporting the bill.
Along with ILSR, independent grocers, small businesses, and antimonopoly advocates have led efforts to successfully urge the Federal Trade Commission (FTC) to enforce the Robinson-Patman Act (RPA) –– a 1930s federal law requiring suppliers to offer the same pricing and terms to all buyers, not just mega-retailers that can leverage their dominance to curry favor from suppliers. Now advocates are urging states to enact a similar law.
The reforms proposed in H 5552 are crucial to ensuring Rhode Island’s many independent grocers can compete on equal ground with Stop & Shop, chain dollar stores, Walmart, and other mega-retailers. Ensuring fairness for independent grocers will help lower prices for consumers, enable new grocery stores to open in food deserts, provide crucial employment, and foster vibrant neighborhoods. The bill bans two of the most significant loopholes in RPA, including “channel of trade” discrimination, in which suppliers sell the same products at different prices to retailers in different “channels,” such as traditional grocery, dollar stores, box stores, and so on. It also bans the kind of access discrimination that was rampant during the pandemic, where dominant retailers would demand that suppliers give them preferential access to crucial goods like toilet paper and cleaning supplies.
Ron Knox“Ensuring fairness for independent grocers will help lower prices for consumers, enable new grocery stores to open in food deserts, provide crucial employment, and foster vibrant neighborhoods.”
In recent years, there has been a renewed focus on antitrust enforcement and legislative proposals in the states. New York paved the way by introducing the 21st Century Antitrust Act, a groundbreaking proposal creating clear, bright-line standards to hold monopolists accountable for the harms they inflict on workers, consumers, small shops, and entrepreneurs. Massachusetts and California are examining similar proposals.
ILSR has been at the forefront with independent business advocates and antimonopoly allies advocating for state action to rein in corporate concentration and ensure fair competition. State-level legislation, like H 5552, is crucial to amplify and preserve federal efforts –– ensuring that the benefits of stronger antitrust enforcement reach all communities.
For more on what states can do to rein in monopoly power, check out ILSR’s virtual event, “How State Policymakers Can Take On Monopolies and Rebuild Local Economies.” You can learn more about predatory buying and laws designed to prevent these monopoly tactics here.
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