Supply Chain Council of European Union |

Biden administration probe of supply chain woes slammed as ‘demagoguery’

A probe by the Biden administration into nine major U.S. companies’ profits amid the global supply chain crisis was lambasted Tuesday by researchers at a libertarian think tank as a fishing expedition bent on blaming businesses for regulatory problems. 

The Federal Trade Commission said Monday it asked Amazon, Walmart, Kroger, Tyson Foods, Procter & Gamble and other retailers, manufacturers and wholesalers for internal documents about their operations as part of its investigation into the supply disruptions that have left consumers scrambling and sent prices soaring. 

“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 in a statement Monday announcing the probe. 

Ms. Kahn said the investigation will examine whether supply chain bottlenecks are adding to rising consumer prices or encouraging companies to take advantage of the situation by engaging in anticompetitive practices. 

But researchers at the Competitive Enterprise Institute (CEI) predicted the investigation won’t uncover wrongdoing because the companies are as much victims of the crisis as anyone else. 

“They are going to find that [retailers] are basically just as caught up by the crisis as much as anybody else,” Sean Higgins, a research fellow at CEI, said at a webinar on the supply chain crisis. 

“These are people who sell products to the public. A supply chain crisis is a crisis for them. It means that they don’t have the products they want to sell,” he added. 

Marlo Lewis, a senior fellow at CEI, said the FTC typically opens investigations when prices spike in a specific sector such as oil and gas. He said investigators usually come up empty, although the probes score political points and favorable headlines. 

“It’s all a matter of supply and demand, but alleging corporate skullduggery makes for political theater,” Mr. Lewis said. “It’s demagoguery. This is an attempt to somehow discredit American enterprises in general.” 

While the FTC probe won’t solve the supply chain crisis, it could result in future regulatory actions aimed at curbing anti-competitive practices such as possible price-fixing or limiting competition. 

The White House has blamed anti-competitive practices for many of the supply chain problems, which has sent inflation soaring to a 30-year high and President Biden’s approval ratings south. 

So far this year, Mr. Biden has ordered the FTC to look into anti-competitive practices in the oil and gas, meat, ocean shipping and freight rail industries. 

While most of the companies being investigated by the FTC declined to comment, a handful including McLane C&S Wholesale and Kraft Heinz said in statements they will cooperate with the investigation. 

The National Grocers Association, which represents independent supermarkets and their wholesalers, applauded the probe. 

NGA Senior Vice President Chris Jones called the move a “key first step,” adding that it will shed light on what he called anti-competitive practices in the food industry.

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