MERCER COUNTY, NJ. October 19, 2024 (Biz Republic) — Rep. Mikie Sherrill (NJ-11) introduced the REDUCE Food Prices Act, which will expand competition in the supermarket and grocery industries and lower costs for New Jersey families. Standing alongside Mercer County Executive Dan Benson, Deputy County Administrator Taraun Tice McKnight, and Hamilton Mayor Jeff Martin at Compare Fresh in Trenton, Rep. Sherrill spoke about how her legislation – introduced with Rep. Jahana Hayes (CT-05) – would give tax incentives for small grocers to start businesses, hire workers, and increase competition in areas with high corporate consolidation.
“All across the Garden State, I’ve heard from families who have struggled to keep up with rising prices at the grocery store – making it harder to put food on the table and make ends meet. That’s why I’m taking action by introducing the REDUCE Food Prices Act, which will increase competition, expand tax credits for small grocery stores to open their doors, and drive down prices for families,” said Rep. Sherrill. “But we can’t stop there. I’m also working to crack down on price gouging and the deceptive practice of ‘shrinkflation’ – when a corporation reduces the size of a product without lowering their prices.”
“Congresswoman Sherrill is right on the money with her legislation to expand independent grocery stores through tax credit incentives,” said Mercer County Executive Dan Benson. “Growing up we got all our food from independent grocery stores, who were invested in our community. By providing tax credits through Congresswoman Sherrill’s legislation we can lower food prices for families in Mercer County.”
“As we see here in Mercer County, when food costs increase, so do food insecurity rates. Consequently, families are left to choose between paying for food versus paying their rent or mortgage, or paying for food rather than paying childcare. When this happens, lives are disrupted. The REDUCE Food Prices Act introduced by Congresswoman Sherrill is a critical step towards relieving families of these stressors.” said Taraun Tice McKnight, Deputy County Administrator & Director, Department of Human Services, Mercer County.
The REDUCE Food Prices Act has also been endorsed by a number of consumer advocacy organizations, including Consumer Federation of America, Consumer Action, and Public Citizen.
“Monopoly power in the food retail sector has raised prices and reduced choices for consumers,” said Thomas Gremillion, Director of Food Policy at Consumer Federation of America. “By creating incentives for small businesses to compete in areas where the big retailers have cornered the market, the REDUCE Food Prices Act will help to level the playing field and build a more resilient, healthier food system that benefits not just consumers but also workers, farmers and ranchers, rural communities, and the environment.”
Food prices have increased significantly for families since the COVID-19 pandemic, with grocery prices rising by over 25 percent from January 2020 to July 2024. Additionally, in 2024, the four largest food retailers account for more than 50 percent of national grocery store sales – a marked increase over the past two decades. That has resulted in higher prices for consumers.
One study found that increased food retail concentration at the local level is associated with large increases in food prices, while another found both that market concentration among food retailers is strongly linked to higher prices and that food price inflation declines when new businesses enter a concentrated market dominated by traditional supermarkets.
The REDUCE Food Prices Act would provide tax incentives for the establishment and operation of small food retail businesses in areas with high food retail concentration and low levels of competition. Specifically, it would create and expand tax incentives for small businesses in the food retail industry that operate in counties where the Herfindahl-Hirschman Index – a measure of industry consolidation by the Economic Research Service of the U.S. Department of Agriculture – is at or above 1,400, indicating that there is moderate to high market concentration in that county’s retail food sector.
For these businesses, the legislation increases the Rehabilitation Tax Credit for investments in the restoration and re-use of historic buildings, the Work Opportunity Tax Credit for the hiring and employment of certain workers, Bonus Depreciation for the purchase of certain investments in new or upgraded equipment or property, and the Qualified Business Income Deduction for certain businesses’ pass-through income.
Also for these businesses, the bill creates a New Food Retail Business Tax Credit equal to 15 percent of a small food retailer’s capital investment in its first three years of operation.
Earlier this year, Rep. Sherrill signed onto the Shrinkflation Prevention Act – legislation that will prevent corporations from deceptively selling less of a product without lowering the price accordingly.
