What would it take for the government to make your food cheaper?

The proposal is easy in the details but said it would allow the Federal Trade Commission and state attorneys general to investigate companies that do not comply with the ban.

According to the fact sheet, Harris would also “rein in unfair mergers and acquisitions” that allow big food corporations to raise prices and undercut competition.

However, the president can’t just tell a grocery store or its suppliers what prices to set. Experts told Business Insider that anyone looking to enact a ban should carefully define what qualifies as price gouging, leaving little room for interpretation to ensure the ban is enforced consistently. Using the Federal Trade Commission to penalize anticompetitive behavior could be an effective way to address excessive pricing as well.

Many states have existing price-gouging laws that attorneys general enacted during pandemic price gouging, and even former President Donald Trump took action early in his term. But state laws fall short in some areas — and that’s where a federal ban could help.

A state-level patchwork and Trump’s idea of ​​federal action

Dan Scheitrum, an associate professor of agribusiness who studies food price gouging at California Polytechnic State University, told Business Insider that existing gouging laws are a patchwork at the state level. He said states have struggled to narrow down this problem because of the scope they use to detect excessive price increases.

For example, he said, some states would consider a 10 percent to 20 percent price increase during a national emergency price increase “unless the retailer can prove their prices have increased.”

“Other states define it very, very broadly and prohibit any unconventional price gouging or any extreme price gouging. And that’s very vague and exaggerated,” Scheitrum continued. “And the problem with these price gouging laws is that they’re either too specific or so sweeping that they’re not often challenged and found in favor of price gouging.”

The pandemic served as a prime opportunity for states to go after price hikes. Scheitrum said that during the initial stay-at-home orders, consumers were changing how they purchased food, and key everyday items saw price fluctuations – especially eggs.

A number of state attorneys general have filed lawsuits against various egg producers for price gouging. For example, Keith Ellison of Minnesota reached a settlement with a Minnesota egg producer in 2021 over allegations that the producer excessively raised egg prices.

The lack of consistency among states when it comes to dealing with price gouging means it’s not being enforced as effectively as it could be, and that’s something a federal ban could help, Scheitrum said.

Isabella Weber, an economist at the University of Massachusetts Amherst, also pointed to Trump’s efforts to crack down on rising medical supplies prices during the pandemic. In March 2020, Trump signed an executive order to prevent hoarding and price gouging of medical resources, setting precedent for administrations to address price gouging in emergency situations.

“I think it’s feasible because in the food sector we’re talking about extreme levels of corporate concentration. So it’s not like you need to investigate an endless number of firms, but you should investigate a handful of giant firms,” ​​Weber . said. “So the problem is severe, but it’s kind of manageable because of the enormous level of concentration we have in the food industry.”

The FTC may be the most effective tool in preventing overpricing

Scheitrum said one problem Harris may have with her current proposal is confusing price gouging with unfair pricing.

“If you were to try to reduce food prices today, there is no emergency. So most price rise protections would not apply at all. There would be nothing to detect because there is no relative price to measure against at this point.” Scheitrum said. “So there are high prices just because of inflation and high prices in general.”

But the focus on companies’ anti-competitive behavior could have teeth, he said, given that many big players in the food industry have been sued or are being sued regarding this matter.

The FTC investigated the cause of high food prices during the pandemic. Most recently, the FTC and the Department of Justice launched an interagency effort to investigate why food prices remain high.

“Many large grocery chains are still making huge profits — the FTC is determined to understand why,” FTC Chairwoman Lina Khan said during a virtual meeting in August.

The FTC has filed lawsuits against major companies such as Amazon, Microsoft, and Google for anti-competitive behavior. The legal process is long, but it could be successful — the agency has been able to block major airline and biotech mergers that could stifle competition.

A guarantee for a national emergency

Weber said a federal ban on price gouging would allow the U.S. economy to be prepared “for when the next shock hits.”

“The kind of profit we’ve seen in the food sector, from grain merchants to grocery stores, is not going to happen to this extent,” she said.

Some Democratic economists and lawmakers praised Harris’ announcement for managing price increases and ensuring the food industry remains competitive. However, some conservative lawmakers and economists have criticized the plan and its impact on the economy, with Trump even calling it communism for the government’s involvement in pricing.

Weber said enacting a federal ban on price gouging “makes a lot of economic sense” and would allow the government to manage excessive prices in a national emergency, as the U.S. has experienced during the pandemic.

“We’re really talking about the prices of essential products,” Weber said. “We’re talking about prices that really hurt when they go up, so a lot of these ideas of ‘Oh, prices go up and so people consume less and so prices go down again’ just don’t apply because people need a place to live.

The food industry is not so safe. The Wall Street Journal reported Monday that major companies are rejecting Harris, blaming corporate greed for high prices. “The proposal calling for a ban on food price gouging is a solution in search of a problem,” the National Grocers Association told the Journal.

Still, Weber said a federal ban is not as extreme as some critics have said.

“So we’re really talking about a cost-of-living crisis and the price of essential products to ensure a decent life,” Weber added, “and not economy-wide price controls or anything like that.”