ANNOUNCEMENT: ICLE President Tells House Panel Antitrust Is Wrong Tool to Fight Rising Food Prices
WASHINGTON (Jan. 19, 2022) — The rise in consumer food prices over the past year cannot plausibly be attributed to increased concentration and the exercise of market power in the food supply chain, International Center for Law & Economics (ICLE) President and Founder Geoffrey A. Manne told a congressional panel investigating the effects of economic concentration on America’s food supply.
In testimony before the U.S. House Judiciary Committee’s Subcommittee on Antitrust, Commercial, and Administrative Law, Manne cautioned members of Congress not to think of antitrust law as a “Swiss Army knife of public policy,” noting that it is an inappropriate tool to address economy-wide inflation.
“Even within the industries that have seen particularly newsworthy price increases, and which are the subject of today’s hearing, the complex competitive dynamics of those industries offer far more plausible explanations of current prices than do unsubstantiated claims of anticompetitive conduct or collusion,” Manne said. “But they don’t offer convenient scapegoats to quell the political consequences of these price increases.”
Manne also warned that reinvigorated federal enforcement of the Robinson-Patman Act of 1936 (RPA) would be particularly ill-advised, as “the primary, and most obvious, effect of RPA enforcement is higher prices.”
“By deterring manufacturers from achieving economies of scale and scope in distribution by requiring them to protect smaller, less efficient competitors, the RPA prevents consumer prices from falling due to these efficiencies,” Manne said. “Indeed, much like predatory pricing, the first consequence of the kinds of discriminatory discounts prohibited by the RPA is to lower retail costs and thus consumer prices.”
He also argued that antitrust action against large grocery stores, as Sen. Elizabeth Warren (D-Mass.) has advocated, is not justified and would leave consumers worse off.
“Despite the nostalgia for the days of the neighborhood grocer, the one-stop-shopping convenience afforded to today’s shoppers has improved consumer welfare in ways that are virtually impossible to quantify,” Manne said.
Manne’s full written statement for the record is available here.