A big feature of Zohran Mamdani’s upset win in the New York City Democratic mayoral primary was his focus on the unfairness of current food prices. He proposed piloting five city-run grocery stores. Voters loved it. Pundits mocked it. The idea was labeled communist, irrelevant, dangerous and silly. But the mockery missed the larger point: Cities have the power to bring down food prices and bring life to food deserts. They just haven’t been using it.
The food system in the United States is rigged in favor of big retailers and suppliers in several ways. Big retailers often flex their muscles to demand special deals; to make up the difference, suppliers then charge the smaller stores more. Those discounts are one reason independent grocers struggle to survive. They’re a major reason we have food deserts. They’re also a major reason that prices are so insane.
Consider eggs. At the independent supermarket near my apartment, the price for a dozen white eggs last week was $5.99. At a major national retailer a few blocks away, it was $3.99. (For an identical box of cereal, the price difference was $3.) Any number of factors may contribute to a given price, but market power is a particularly consequential one.
The thing is, preferential discounts can violate federal law. A 1936 statute called the Robinson-Patman Act forbids suppliers from offering sweetheart deals that aren’t based on actual efficiencies of scale. The idea behind the law was to make sure smaller retailers could get a fair shake and consumers could get the benefit of real competition. But in the 1980s, amid a general climate of deregulation, the government largely backed off. For the two decades after 2000, no cases were brought at all. When Lina Khan became chair of the Federal Trade Commission in 2021, she brought two Robinson-Patman cases. But one of the first acts of President Trump’s new commissioners was to pull the plug on one of them.
Cities like New York don’t have to wait for the federal government to act. They can pass their own laws against price discrimination and include real penalties. That could improve profit margins for existing independent stores. It would help them to survive in the areas where people most lack access to good, affordable groceries and fresh food. And it would incentivize more small groceries to set up shop — all developments that could bring the kind of neighborhood-level competition that drives down prices.
The standard objection to this logic is that big national chain retailers earn those discounts simply by being more efficient. That may be true in individual cases, but more broadly, the evidence is not so straightforward. Independent grocers that band together in associations — as many of those in New York City do — can be just as efficient as their larger competitors. Even if the little stores’ costs are higher in a few areas, any economist will tell you that more retail competition leads to lower prices overall.
Cities can do more. They can support public or cooperative wholesale centers that pool purchasing power for small stores. They can build food hubs that connect independent grocers to local farms. They can invest in distribution the way we once invested in the post office: as a public good that serves all, big and small.
Here in New York, that starts at Hunts Point. An enormous food distribution hub in the Bronx, Hunts Point handles an estimated 4.5 billion pounds of food each year, but until recently it was outdated and optimized for only the biggest players. A major modernization funded by the city and the state includes a 60,000-square-foot cold storage facility for upstate farms. That could help them reach beyond upscale farmers markets to local shelves.
To be sure, small Hudson Valley egg and apple farmers aren’t competing directly with every sale made by large distributors at Hunts Point. And there might be additional factors that raise their prices, like a commitment to organic farming. But local farming is not all geared toward high-end shoppers, and its products do overlap in certain market arenas, where freshness, quality and regional identity matter. Building new distribution capacity will lessen the price gap and unlock new agricultural ventures.
Getting the food into the five boroughs is just part of the problem, however. New York needs to take steps to ensure that stores are free to stock it. Right now, major national and regional food distributors can lock grocers into exclusive contracts that punish stores for looking for better prices or selection. Cities can ban these shady practices, and use the consumer protection agency to enforce the rules.
Cities can also police price gouging. When many people think of price gouging, they picture something like a guy selling surgical masks out of a truck for $100 during the Covid pandemic. But the real profiteers are often Fortune 500 Goliaths, not the retailers — meatpackers, packaged goods manufacturers and national grocery chains that noted the strain Covid put on global supply chains and responded by raising prices much more than they needed to.
New York City has a strong price gouging law on the books, which forbids anyone — suppliers and retailers — from jacking up prices during a state of emergency unless the seller’s own costs have gone up accordingly. The city couldn’t have stopped the bird flu that devastated flocks, but maybe it can stop suppliers from cynically exploiting a crisis to justify exorbitant prices.
None of this is utopian, communist or silly. It’s practical, it fosters open markets, it’s a lifeline for small businesses and it’s popular. People are tired of being squeezed at the checkout counter while corporate giants count their profits. They want groceries they can afford, stores they can trust and fair prices, not rigged ones. Cities, where people live in direct contact with one another and with power, can be more responsive to those desires than the national government can. Cities can enforce anti-discrimination laws, crack down on monopolistic deals and rebuild the bones of a better food system — and they can point the way for the rest of the country, too. Just look how influential New Yorkers’ fight for a $15 minimum wage turned out to be. So the next time you’re staring down a $10 carton of eggs, remember: Call the mayor.
Zephyr Teachout, a Fordham School of Law professor, is the author of “Break ’Em Up: Recovering Our Freedom From Big Ag, Big Tech and Big Money.”
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