House Republican and former grocer Michael Rulli criticizes Vice President Kamala Harris’s price control proposal, raising concerns about market disruptions and the viability of small businesses.
At a Glance
- Rep. Michael Rulli argues price controls could harm grocery stores with already thin profit margins.
- Rulli warns manufacturers might discontinue products, reducing consumer variety.
- Harris’s plan aims to combat food price gouging and protect consumers from corporate exploitation.
- National Grocers Association and small grocers fear market disruptions from Harris’s proposal.
Rulli’s Industry Insights
Rep. Michael Rulli of Ohio, who transitioned from the grocery business to politics, has voiced serious concerns about Vice President Kamala Harris’s recent proposal to implement grocery price controls. Rulli argues that this measure could devastate the grocery industry, which operates on extremely thin profit margins of around 1.5%. According to Rulli, this would severely impact small, independent grocery stores that are already struggling to stay afloat.
“We’re dealing with a lot of them. The net profit in grocery stores is about one and a half — if they’re doing really well, one and a half,” Rulli said in an interview. “Simply put, that’s about $1.50 for every $100 of sales at the register. And what we’ve seen over the last three to four years has been pretty terrible.”
Rulli emphasizes that price controls could force major manufacturers like Procter & Gamble to stop producing certain products. He stated, “If the Harris administration tells Cincinnati-based Procter & Gamble that this Tide snack I’m selling here today for $4.99 has to stay at $4.99 for the next four years, Procter & Gamble will simply choose not to make that product anymore.” This would limit the variety of products available to consumers, potentially leading to store shelves resembling those in control-heavy economies like Cuba or Venezuela.
Harris’s Justification and Advocacy
Kamala Harris defends her proposal by citing the need to prevent big corporations from exploiting consumers during inflationary periods. Harris argues that the high costs of food items have persisted despite improvements in the supply chain, suggesting that price gouging is a key issue that needs addressing. “As president, I will take on the high costs that matter most to most Americans, like the cost of food,” Harris said earlier this month at a rally in North Carolina. “We all know that prices went up during the pandemic when the supply chains shut down and failed. But our supply chains have improved, and prices are still too high.”
Her allies point out that large food manufacturers have recorded significant profit increases in recent years, adding to the argument that intervention is necessary. However, this move has drawn criticism not just from Republicans, but also from some Democrats who fear that these measures resemble Communist-style price controls. The National Grocers Association, for one, suggests that enforcing existing antitrust laws might be a more effective solution.
On behalf of the American people, I thank Joe Biden for his extraordinary leadership as President of the United States and for his decades of service to our country.
I am honored to have the President’s endorsement and my intention is to earn and win this nomination.
— Kamala Harris (@KamalaHarris) July 21, 2024
Political and Economic Implications
Economically, the ramifications of Harris’s proposal could reach far beyond the grocery aisles. Critics warn that such controls could disrupt the entire supply chain and undermine the free-market principles that many Americans value. Rulli notes, “Many of these smaller and independent grocery stores will go out of business. You’ve already seen it happening gradually over the last 20 or 30 years, but I would say just recently within the 80-mile circumference I’m sitting in right now, there’s been five grocery stores that have gone out of business in the last two years.”
Politically, this issue could serve as a hot-button topic in upcoming elections. Both Harris and Donald Trump have been vocal about their differing approaches to handling economic hardships. Harris aims to appeal to progressive voters with her strong stance against what she calls “corporate exploitation,” while the GOP, including House Republicans like Rulli, continue to champion free-market solutions as the best path forward.
