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Current National Legislative Update

RIFDA National Legislative Update

May 2022

Overview:

The following list provides an overview of the national issues that are being followed this year by several national associations.  We will attempt to provides updates on these as information becomes available.

2022 Priority Issues 

  • Labor: Workforce Supply and Regulatory Enforcement
  • Supply Chain/Transportation
  • Feeding Assistance Programs: SNAP, WIC, School Lunch
  • Pharmacy: PBM Reform; DIR Fees; Vaccinations
  • Inflation/Economy
  • Food Safety: Traceability
  • Cybersecurity: Privacy/Data Security/Ransomware
  • Sustainability: Food Waste; EPR; Packaging; Recycling
  • Payments: Swipe Fee Reform; Credit Competition
  • Organized Retail Crime/Asset Protection
FDA and White House Announce Steps to Address Infant Formula Supply and House E&C Oversight Subcommittee Announces Hearing on Shortages:
This week, after rising concerns about shortages of infant formula, FDA and the White House announced new approaches to increase the supply of infant formula across the country. Infant formula supplies were, in part, already low due to pandemic-related supply chain challenges and they were further impacted due to the shutdown of an Abbott Nutrition plant in Michigan following a manufacturer recall in February. Now, recent information from Datasembly has shown that formula availability, which does vary regionally and by type of formula, has decreased in the past two weeks shown through a rising out-of-stock percentage. Datasembly reported nationwide out-of-stock percentages at 43% for infant formula as of May 8, which had prompted additional actions by FDA and the White House this week and a congressional hearing May 25.
 
On Tuesday, FDA released an update on infant formula and the steps it has taken to improve supply. On Thursday, President Biden spoke with several infant formula manufacturers and retailers to discuss the critical steps needed to improve the situation. The White House then announced steps to address the infant formula shortage. Notably, they will be working to speed up the manufacturing process, have USDA work with states to allow flexibilities (size and type) in the WIC program to make it easier for families to purchase the formula they need with their WIC benefits, crack down on any price gouging or unfair market practices, and explore ways to increase the supply of formula through increased imports from trading partners. The White House did elaborate that the FDA will soon “announce specific new steps it is taking concerning importing certain infant formula products from abroad.”
 
Additionally, President Biden sent a letter to Federal Trade Commission Chair Lina Khan, asking the Commission to examine the infant formula market and investigate and address “any illegal conduct” that might be worsening the shortage or contributing to hoarding. The letter also noted the important steps retailers have undertaken to serve their communities including that “retailers have largely and responsibly refused to hike prices on infant formula for young families, recognizing this good is critical to the health of children.”  Please let FMI know if you have been approached by any third parties attempting to sell infant formula to retailers.  
 
The Oversight and Investigations Subcommittee of the House Energy and Commerce Committee announced an oversight hearing on infant formula shortages on May 25, 2022. Additional details will be released closer to the hearing.
  

 

NACS and other fuel retail groups are concerned the House bill singles out motor fuel for legal scrutiny.

ALEXANDRIA, Va.—The U.S. House of Representatives is expected to  vote this week on legislation that would prohibit “excessive” or “exploitive” fuel prices. The bill, H.R. 7688 “The Consumer Fuel Price Gouging Prevention Act,” would give the president authority to issue an energy emergency proclamation for 30 days over any U.S. jurisdiction, and it can be renewed in 30-day periods.

During the emergency, it would be illegal to sell consumer fuel at a price that is “unconscionably excessive” and “exploitive.” In addition, the bill would give the Federal Trade Commission power to issue penalties for price gouging. Consumer fuels are defined as gasoline, jet fuel, aviation gasoline, biofuel, home heating oil and liquid propane used for residential heating or energy generation.

In advance of the House vote, NACS, along with NATSO and SIGMA, sent a joint industry letter to each member of Congress voicing concerns that the bill singles out motor fuel for legal scrutiny, as most states already have laws prohibiting price gouging.

“We oppose gouging, which harms the American public, and the industry as a whole,” wrote the groups in the letter. “That said, actual gouging at retail is very rare. Gouging is simply not a characteristic or driving force of the retail market price we see today.”

The letter also emphasized that the bill creates duplicative laws between the federal government and the states without preempting state laws.

“The overlap of a federal law with the state laws can create confusion and unwarranted risk of legal investigations and expense,” reads the letter.

In addition to confusion between federal and state laws, the bill would create an unwarranted retail-focused enforcement by giving state attorney generals the ability to bring enforcement action exclusively on retail sales of motor fuels.

“This differential treatment and focus on retail sales is not consistent with the fact that the market changes leading to high prices today are not occurring at retail—and, in fact, retail margin is one of the smallest components of the price of motor fuel going back many years.”

The bill is expected to pass the House by a mostly partisan vote without Republican support.

Though Senate Majority Leader Chuck Schumer (D-NY) has stated his intention to bring price gouging legislation up in the Senate, the pathway for passage is more challenging as it is unlikely to have the necessary 60 votes needed to move any bill through the cloture process.

NGA Urges Swipe Fee Reform, Calls For End To Anticompetitive Tactics

 

The National Grocers Association called on lawmakers to fix the “broken” U.S. card payments system and stem the rising tide of swipe fees that compound the impact of inflation and cost merchants and consumers billions of dollars annually.

NGA submitted a statement for the record to the U.S. Senate Committee on the Judiciary in advance of the committee’s hearing on May 4, “Excessive Swipe Fees and Barriers to Competition in the Credit and Debit Card Systems,” convened by Chairman Dick Durbin and Ranking Member Chuck Grassley.

“For more than a decade, Visa and Mastercard have set not only their network fees – the costs associated with a credit or debit card payment being routed through their network, but the interchange fees that merchants pay to the issuers of the credit and debit cards that Americans transact with. Nearly twice a year, every year, these two card networks have instituted fee changes which, on net, almost always lead to increases in merchants’ costs,” NGA declared in the statement. “This hearing comes on the heels of a net $1.2 billion increase in interchange fees implemented by Visa and Mastercard in April 2022.”

“U.S. merchants pay the highest swipe fees in the industrialized world, but they have no ability to affect these costs,” said Greg Ferrara, NGA president and CEO. “These anticompetitive fees imposed on independent grocers drive up the costs of food and other goods at a time when Americans are already reeling from a level of inflation not seen in a generation.”

Robert Yeakel, VP of government relations for NGA, also commented on the release, saying that “the two global networks centrally set the pricing and structure of swipe fees. In any other market, be it grocery or elsewhere, if prices were centrally set by two companies for the rest of the industry’s participants, there would be significant antitrust concerns. In the credit card space, however, this has been industry practice for more than a decade.”

The full text of the statement is available here.

NGA is the national trade association representing the retail and wholesale community grocers that comprise the independent sector of the food distribution industry. An independent retailer is a privately owned or controlled food retail company operating a variety of formats.

The independent grocery sector is accountable for about 1.2 percent of the nation’s overall economy and is responsible for generating more than $250 billion in sales, 1.1 million jobs, $39 billion in wages and $36 billion in taxes. NGA members include retail and wholesale grocers located in every congressional district across the country, as well as state grocers’ associations, manufacturers and service suppliers.

 

 

Information for this update was gather via FMI, NGA, and NACS communication vehicles.