A Bipartisan Push to Revive a 1930s Law Could Make Grocery Prices Even Higher

If the government revives the Robinson-Patman Act to force suppliers into charging small and large retailers the same price for vastly different quantities of the same product, that will mean higher prices.

Groceries, like almost everything these days, are seeing prices rise. Millions of Americans have tempered some of these hikes by purchasing bulk goods at wholesale prices at warehouse club retail stores such as Costco, Sam's Club, and BJ's Wholesale Club. But these savings could soon cease. A bipartisan coalition of lawmakers is looking to crack down on wholesale prices by reviving a nearly 90-year-old antitrust statute.

In the weeks leading up to Congress' winter recess, Sen. Chuck Grassley (R–Iowa) solicited the signatures of fellow Senate Republicans on a letter to Attorney General Pam Bondi and Federal Trade Commission (FTC) Chairman Andrew Ferguson asking them to investigate supply practices that hurt small businesses, particularly grocers. Reason has acquired a copy of the letter, which calls on Bondi and Ferguson "to utilize all federal laws…to bring enforcement actions against any discriminatory conduct that you may discover in violation of…the Robinson-Patman Act."

The Robinson-Patman Act (RPA) is a 1936 antitrust law that bans discrimination "in price between different purchasers of commodities of like grade and quality…where the effect of such discrimination may…tend to create a monopoly in any line of commerce." After a period of strong enforcement in the mid-20th century, recent decades have witnessed a marked decline in federal RPA cases: Before the FTC, under the leadership of Chairwoman Lina Kahn, sued Southern Glazer's Wine and Spirits for selling alcohol to larger retailers at lower per-unit prices in December 2024, it had been more than 20 years since the federal government filed an RPA suit. Then–FTC Commissioner Melissa Holyoak dissented from Khan's complaint, which she characterized as "elevating the interests of competitors over competition" in a way that was "at odds with the plain text" of the RPA.

Grassley argues that the statute recognizes certain forms of price discrimination as harming competition, but he doesn't acknowledge that the RPA allows price differentials that reflect "differences in the cost of manufacture, sale, or delivery resulting from the differing methods or quantities in which such commodities are to such purchasers sold or delivered."

Grassley claims that a lack of competition is forcing independent grocers "to accept increasingly discriminatory terms and conditions for their products, including less favorable…price terms"—even as he rightly describes the grocery business as "experienc[ing] high turnover and low margins." Such phenomena are textbook indicators of a competitive industry, not a monopolized one.

Grassley also claims that "independent businesses are often the only source of groceries, consumer goods, or pharmaceuticals in many small towns and urban centers." If this were true, such small businesses needn't worry about larger firms receiving bulk price discounts; they wouldn't be competing with them at all.

Of course, the opposite is true. Local businesses face intense competition from Amazon, Walmart, Target, FreshDirect, CVS, Walgreens, and the myriad other firms that ship groceries, goods, and drugs directly to consumers. These large firms enjoy bulk discounts and attract customers by passing on part of their savings to them in the form of lower prices.

Unfortunately, Grassley is not the only official looking to leverage the RPA to punish productive firms and consumers. On Thursday, December 18, Sen. Cory Booker (D–N.J.) introduced the Fair Competition for Small Business Act of 2025, which would amend the RPA to "allow state attorneys general to pursue monetary damages against distributors and retailers that engage in unlawful price discrimination." Rep. Maxine Waters (D–Calif.) has introduced companion legislation in the House.

Grocery prices are high. Cracking down on wholesale pricing won't fix this problem, it will exacerbate it.

Comments

[Don't look at me! ( Is the war over yet?)]

Stop voting for people that never ran a business.

[Longtobefree]

It will take a constitutional amendment, but "public servants" should be required to either have worked for wages for 5 years or have personally run a business that was profitable for 3 or more consecutive years.

[Aspiring Statesman]

Likewise, "Academia" should require a year+ of practical work experience *in one's target field* between degrees.

[Sometimes a Great Notion]

Congress knows how to run a successful operation; just look at their balance sheet.

https://www.usdebtclock.org/

[Neutral not Neutered]

Now that Mom and Pops are essentially gone the fear of big box stores and Amazon taking over appears?

Too late and reactively trying to ride the wrong horse is how the gov tries to solve everything. Another attempt to bring a failed law back in place because they have no NEW Ideas? Beat the wrong dead horse and blow smoke long enough maybe we can expand gov in this direction, bs?

You know it is horrible is Maxine Waters thinks it is a good idea. The squirrel on her head whispering into her ear

[Incunabulum]

So . . . bipartanship *isn't* good now?

Last month it was good.

Or is it bipartanship when its opposed to Trump its good?

[Butler T. Reynolds]

It's bad economics, numbnuts.

[JFree]

If the government revives the Robinson-Patman Act to force suppliers into charging small and large retailers the same price for vastly different quantities of the same product, that will mean higher prices.

The only thing that has happened re that act is that it hasn't been enforced since the 1980's - at the demand of sp500 type companies. IOW - this is entirely a large v small - not a producer v consumer - or anything to do with prices. Reason will side with whoever makes the biggest donations - which means the large companies.

There is zero real world evidence that those large companies are going to reduce prices out of the goodness of their heart. They will reduce prices because of COMPETITION and only because of competition and that competition must be forced on them - by govt - because otherwise those companies will donate to Reason and buy pols and applaud/force the smaller retailers (competition to the larger/chain retailers) out of business. And then jack up prices.

So what has happened since the 1980's? The momnpop retailer is gone in the US. The US still has way too much retail space overall - but a whole slew of that space is now NOT doing anything. It is sitting - vacant - in malls where the big box wholesaler model initially drove the momnpop out of business - moved it to the mall far from customers on MainSt - and then itself went out of business replaced by deliveries.

Do kids today still 'hang out at the mall'? I don't see that because malls are now dead. Prices aren't lower/competitive - otherwise affordability wouldn't be a nod-your-head comment. Entire towns now have nothing but chain retailers so there is no pricing power even within that town. So this article looks like more Reason donor economics/propaganda.

[JFree]

Specifically re groceries - the subject of the article - a measure of how much competition there is in the industry is called the Herfindahl-Hirschman Index. That indicates whether grocery stores compete with each other to get lower prices from suppliers so they can pass them on to consumers. THAT's the only point of real competition. Not reduced competition from retailers/wholesalers re producers so they can have higher margins.

From 1990 to 2019 - food retail concentration has increased by 453% and far more at the local/county level than nationally.

No surprise - data analytics and GIS now makes it possible to drill down and measure that impact even at the local level. Which certainly reduces any 'need' to have this sort of law at the federal level - but the local impact clearly shows that the need is higher now to enforce similar laws at the local level since those local geographies have no economic power to create a level playing field.

[Butler T. Reynolds]

Hey, Bernie, is that you?

[Aspiring Statesman]

If I were a manufacturer, I'd simply stop selling in small quantities. Every buyer would get the same price for the same box-car sized purchase. Take that Congress!

[GroundTruth]

Aside from packing and shipping costs, why should a supplier of widgets or cornflakes be charging a big chain less than a mom&pop? It costs the producer the same to make the product regardless of who it's going to.

I hate seeing government involved in this, but from the point of view of the end consumer, the large v small discrimination leaves a bad taste in my mouth. And the same goes for healthcare: for a given service or drug, why should a large insurer pay a lower rate (aside from business office costs) than a individual paying cash at the time of service?

[Vernon Depner]

When I was young and without medical insurance, doctors would routinely give me a 50% discount for paying cash.

[Enemy of the State]

See economies of scale, set up costs, transaction costs and other economic concepts as well as the fiduciary duty of management to maximize ROI for why businesses price discriminate on size....

[Don't look at me! ( Is the war over yet?)]

I can tell you never ran a business.

[Sevo, 5-30-24, embarrassment]

"Aside from packing and shipping costs, why should a supplier of widgets or cornflakes be charging a big chain less than a mom&pop? It costs the producer the same to make the product regardless of who it's going to."

Sarc or stupidity? I see your knowledge of business and costs never even got to a lemonade stand-level.

[IceTrey]

It's so stupid everyone knows buying in bulk gets you a lower price. The answer as always is less government.

[Don't look at me! ( Is the war over yet?)]

Buy cheesy poofs in bulk to save money!

[KiwiDude]

Doesnt the US govt buy in bulk (cars, uniforms, stationery, etc) to get better deals?
Different because they are in charge?

[TJJ2000]

Here's a thought that isn't Gov - 'Gun' power-mad STUPID.

Maybe all these $20/hr minimum wage laws is the PROBLEM.
It takes more time to sell one-marble at a time than a whole bag.

Who is going to be 'allowed' to sell one-marble that has a profit margin of 1/2-cent?
That would require 4,000 sales every hour tax-free to just meet minimum wage.

'Guns' (Gov-Guns) don't make sh*t people.
Get it through your commie - indoctrinated heads already.

[TJJ2000]

[D]emocrat dipsh*ts passed these stupid laws; LET THEM suffer the consequences.

[LIBtranslator]

Patman the Texas Baptist Prohibitionist tried to impeach Treasury Secretary Andrew Mellon for owning a distillery, while not seeking to ban music and dancing. Real intelligent specimens today's looters seek to emulate in their legislation.