The US Federal Trade Commission (FTC) is to launch a new investigation into why grocery prices remain inflated when food inflation has eased from its peak.

The government body, which has a brief to protect the public from deceptive or unfair business practices and from unfair methods of competition, co-hosted the first meeting of the Strike Force on Unfair and Illegal Pricing with the Department of Justice (DOJ) yesterday (1 August).

At the meeting, FTC chair Lina Khan announced that she will ask the Commission to launch an inquiry into grocery prices “in order to probe the tactics that big grocery chains use to hike prices and extract profits from everyday Americans at the checkout counter”, according to a post-meeting statement put out by the FTC and seen by Just Food.

"We want to make sure that major businesses are not exploiting their power to inflate prices for American families at the grocery store," Khan said.

Once the probe announced yesterday has been ratified by the FTC, the large grocery chains will be ordered to provide information on their costs and prices on common products.

The latest US consumer inflation report, released last month, showed grocery prices rose just over 1% in the last 12 months, compared to 5% a year earlier.

But a number of major US food companies - including confectionery heavyweight Hershey this week - said they are still suffering from consumers staying away from less-than-essential spending.

Michele Buck, its president and CEO, said that the “operating environment remains dynamic, with consumers pulling back on discretionary spending”.

It is not the first time the Biden-Harris Administration has pointed its finger at the country’s largest grocery chains and food manufacturers in relation to their pricing policies and profits.

In March 2024, at the sixth meeting of the White House Competition Council, President Biden announced action to root out behaviour that hikes prices on American families.

It is also concerned about competition in the sector.

In February, the FTC moved to block the merger of two of the largest grocers in the country, Kroger and Albertsons. The date of the first preliminary hearing on the FTC suit is scheduled to take place in Oregon on 26 August.

The merger was temporarily halted by a US judge last month.

The US government is also investigating what it sees as a lack of competition in the meat, egg and infant-formula categories.