The Federal Trade Commission has ordered major U.S. retailers and e-tailers like Walmart, Amazon, and grocery chains to turn over documents related to supply chain shortages in a probe examining rising prices and reduced inventory on store shelves.
The probe comes amid rising criticism of the Biden administration over its failure thus far to resolve a supply chain crisis that began over the summer and has not dramatically improved since.
The purpose of the investigation “will be to determine if supply chain problems have led to particular bottlenecks, anti-competitive practices or higher prices for consumers,” DailyMail.com reported Tuesday, citing a statement from the FTC that was released on Monday.
“Supply chain disruptions are upending the provision and delivery of a wide array of goods, ranging from computer chips and medicines to meat and lumber,” FTC chair Lina Khan said. “I am hopeful the FTC’s new study will shed light on market conditions and business practices that may have worsened these disruptions or led to asymmetric effects.”
On Tuesday, White House press secretary Jen Psaki attempted to dismiss runaway inflation, claiming it “will be over soon” even though Federal Reserve Chairman Jerome Powell said a few hours earlier he expected prices to continue rising into next year.
For months, supply chain issues have led to backlogs of container ships at U.S. ports, fed in large part by a shortage of truck drivers and warehouse workers, leading to a shortage of goods at retail outlets which have in turn led to higher prices.
In October, inflation stood at 6.2 percent from the previous year, the largest increase in more than three decades.
That same month, the Biden administration formed a supply chain task force to evaluate the situation and recommend solutions and workarounds as industry experts predict supply chain disruptions are likely to continue well into next year.
Experts have said the issue is not demand; Americans are buying record numbers of products from manufacturers in the U.S. and abroad. Rather, they say it has been difficult to get those goods offloaded and transported to distribution hubs and retailers around the country.
“It’s like bringing 10 lanes of freeway traffic into five,” Gene Seroka, head of the Port of Los Angeles, told Fox News in October. “It’s more cargo than we’ve ever seen in our lifetime.”
“Our message right now is, get out and if you see something your child has on his or her list, pick it up now to make sure you have it for the holidays,” said Ed Desmond, executive vice president of external affairs for the Toy Association, told the network.
But the FTC’s demand for documents from retailers appears to indicate the agency suspects they are intentionally limiting supplies of goods in order to drive up prices and profits. The agency gave Kroger Co, C&S Wholesale Grocers Inc., Associated Wholesale Grocers Inc., Berkshire Hathaway unit McLane Co Inc, Procter & Gamble Co, Tyson Foods, and Kraft Heinz, among others, 45 days to provide the information.
The FTC “also asked for internal documents with strategies for maintaining their supply chain and determining pricing, as well as data on profit margin and market shares,” DailyMail.com added.
That said, President Biden met with the CEOs of major retail chains on Monday at the White House in an attempt to find ways to get products to store shelves more quickly amid a holiday shopping season.
During their meeting, the president did not appear to lay the blame for the supply chain crisis on them. Rather, he complimented the CEOs, telling them they are doing a “heck of a job…to make sure people aren’t disappointed this past Thanksgiving, as well as Christmas coming up.”
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