FTC Launches Inquiry Into Supply Chain, Orders Companies to Participate

WASHINGTON, D.C. — The Federal Trade Commission (FTC) is turning to large retailers, wholesalers and consumer goods suppliers to get to the bottom of ongoing supply chain issues.

The agency is issuing orders to provide more information on the disruptions to Walmart Inc., Amazon.com Inc., Kroger Co., C&S Wholesale Grocers Inc., Associated Wholesale Grocers Inc., McLane Co. Inc., Procter & Gamble Co., Tyson Foods Inc., and Kraft Heinz Co.

The companies will have 45 days from the date they received the order to respond.

Under Section 6(b) of the FTC Act, the agency is authorized to conduct wide-ranging studies that do not have a specific law enforcement purpose. 

"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. I am hopeful the FTC's new 6(b) study will shed light on market conditions and business practices that may have worsened these disruptions or led to asymmetric effects," said FTC Chair Lina M. Khan.

"The FTC has a long history of pursuing market studies to deepen our understanding of economic conditions and business conduct, and we should continue to make nimble and timely use of these information-gathering tools and authorities," Khan added.

The study will also examine whether supply chain disruptions are leading to specific bottlenecks, shortages, anticompetitive practices, or contributing to rising consumer prices.

As part of the orders, the retailers are required to detail:

• The primary factors disrupting their ability to obtain, transport and distribute their products;
• The impact these disruptions are having in terms of delayed and canceled orders, increased costs and prices; the products, suppliers and inputs most affected; and
• The steps the companies are taking to alleviate disruptions and how they allocate products among their stores when they are in short supply.

The FTC also is requiring the companies to provide internal documents regarding the supply chain disruptions, including strategies related to supply chains; pricing; marketing and promotions; costs, profit margins and sales volumes; selection of suppliers and brands; and market shares.

In addition, the agency is soliciting voluntary comments from retailers, consumer goods suppliers, wholesalers, and consumers regarding their views on how supply chain issues are affecting competition in consumer goods markets. These comments provide an opportunity for market participants to surface additional issues and examples of how supply chain disruptions are affecting competition, according to the FTC.