ICLE Brief Warns Uniform Grocery Pricing Mandates Could Raise Consumer Prices
PORTLAND, Ore. (March 17, 2026) — As several states consider legislation to mandate uniform wholesale grocery pricing, a new issue brief from the International Center for Law & Economics (ICLE) finds the measures would likely reduce competition, discourage discounting and raise consumer prices.
The brief examines proposals such as New York Senate Bill S8563, with similar measures under consideration in Minnesota, Arizona and Rhode Island. The bills would prohibit large suppliers from offering different prices or contract terms to retailers purchasing equivalent quantities of goods. Supporters often justify the policy with the so-called “waterbed effect” theory, which claims discounts for large buyers force suppliers to raise prices for smaller ones.
Author Eric Fruits, ICLE’s director of economic research, argues the mandates would function as a statutory “most-favored-nation” regime. By requiring suppliers to extend any discount offered to a large retailer to all buyers, the policy creates strong incentives to eliminate targeted discounts, leading to higher, uniform wholesale prices.
The bills would also require suppliers to disclose anonymized contract terms from dominant retailers, which Fruits said could weaken incentives to negotiate discounts.
“Economic research shows that greater pricing transparency in concentrated markets can facilitate coordination and weaken price competition,” he writes. “Advances in artificial intelligence further complicate the assumption that disclosed contract terms can remain effectively anonymized.”
The full issue brief is available to download here and a shorter version of the brief is available here. To arrange an interview with Fruits, contact ICLE Director of Communications Jim Fellinger at [email protected].
About ICLE
The International Center for Law & Economics is a nonprofit, nonpartisan research center working with a roster of more than one-hundred academic affiliates and research centers from around the globe. ICLE scholars promote the use of law and economics methodologies to inform public policy debates.