Corporate price gouging and inflation: Kamala Harris gets it

About a dozen times I’ve written about price gouging being one of the biggest drivers of inflation, along lamenting about how politicians weren’t talking about it.

President Biden took up the topic recently, and Kamala Harris, vice president and the presumptive Democratic nominee for president, announced it Friday as part of her economic agenda.

Harris said she would work in her first 100 days to help Congress pass a national ban on price gouging for food and groceries, as well as give the Federal Trade Commission and prosecutors authority to go after companies they determine price gouge, take a closer look at mergers between big grocery companies, and investigate specifically price-fixing in meat supply chains.

At last.

Here’s what Accountable.US, a consumer watchdog group, says about price gouging:

Across industries, American families have felt the pressure of corporate price gouging. At the same time, corporate profits have risen sharply, with totals driving up to 53 percent of inflation costs in the second half of 2023.

Food. Grocery store chains such as Kroger, Walmart, Target, and Costco have reported consistently high profits and net incomes year over year – those aren’t savings they’re passing on to consumers. 

In addition, the grocery market may get even smaller. Grocery giants Kroger and Albertsons have proposed a merger that would “result in the loss of $334 million in wages” and bring on “fewer grocery stores and higher prices.” Recent history has shown Kroger and Albertsons can’t be counted on to prioritize consumers over their investors.

The Federal Trade Commission and the attorney general of Colorado have taken action to block the merger on behalf of American families. Last month, Colorado Judge Andrew J. Luxen granted a preliminary injunction to temporarily block the merger. 

For meatpacking, companies are taking advantage of their employees and customers.

In 2022, an Accountable.US review found that Cargill, Tyson, JBS, and National Beef Packing – some of the largest meatpacking companies in the country – took in just under $13 billion in FY 2021 profits, with most reporting record years and the benefits of higher prices. That’s even after two of these companies were involved with at least $384 million in fines and settlements over price-fixing and have been widely criticized for worker mistreatment during the pandemic. 

These companies have also spent billions on shareholder buybacks and dividends.

When it comes to eating out, research from Accountable.US has shown that food companies such as McDonald’s, Domino’s Pizza, Yum! Brands, and Coca-Cola have increased their prices at greater rates than baseline food inflation. This has allowed them to spend hundreds of millions rewarding their shareholders.

Big Pharma. The Biden-Harris administration revealed Thursday the final negotiated prices for the Inflation Reduction Act’s historic Medicare negotiation program, promising $1.5 billion in out-of-pocket savings for Medicare beneficiaries, and $6 billion in savings for the program itself. 

Even with an excessive $9.35 billion in 2023 profits, the companies required to negotiation fought, and in some cases continue to fight, to block the program and keep prices as high as possible for seniors and other Medicare patients. The industry spent nearly $400 million on lobbying in 2022 to block the requirement. 

What is Big Pharma doing with those extra profits? 

A report from Accountable.US showed earlier this year that these drug manufacturers have spent far less on research and development compared to what they spent on other priorities such as political activity, executive compensation, and handouts to investors.

Housing. A recent Accountable.US report found the six largest publicly traded apartment companies brought in nearly $300 million combined in increased profits in the first quarter of 2024, many due to rent increases. All six of the landlords featured in the report have faced lawsuits related to their use of RealPage, the property management software company under investigation from the U.S. Justice Department for allegedly facilitating price-fixing.

More than half of U.S. renters are now spending more than 30 percent of their income on rent, intensifying families’ financial strain as wages fail to keep pace with rent hikes. 

So, let’s go Joe, Kamala, and Congress. American families need relief as soon as possible from corporate price gouging.