Albertsons, America's second-largest grocery chain, is reportedly informing suppliers that will be affected by the new Trump administration tariffs that it's not the company's problem, according to a recent letter:
Albertsons, which owns 2,200 grocery stores across the U.S., sent a letter to suppliers in late March spelling out how it would deal with price hikes.
“With few exceptions, we are not accepting cost increases due to tariffs,” the letter read (emphasis in the original).
The letter laid out the grocer's reason for the policy was "maintaining the value propositions our customers expect.” In other words, to keep grocery prices low and customers coming back.
It continued:
“Suppliers are not permitted to include tariff-related costs in invoices without prior authorization by Albertsons Companies. Any invoices that include such charges without prior authorization will be subject to dispute and may result in payment delays.”
You may have noticed that Albertsons used the phrase "with few exceptions." What does a supplier need to do if they think their products fall into that category?
[Any] suppliers hit by tariffs will be forced to go through a multistep process to “request a cost change” for the goods they supply to Albertsons, starting with giving the company 90 days’ advance notice. They will need to fill out cost-change forms, offer “a detailed explanation of the tariff impact” and hand over supporting documents, such as tariff notices or import duty receipts.
Once all documents are submitted, the supplier will need to wait another 30 days for Albertsons to review. And even then, approval “is not guaranteed,” the letter said.
Ironically, this came to light because some progressive journal got its hands on the letter to the suppliers, and meant to make an example of Albertsons' decision--to show how evil corporations are.
David Dayen, the executive editor of progressive magazine The American Prospect, who first uncovered the letter, held it up as a sign that big companies could pass on price hikes freely while smaller competitors would suffer or even go out of business.
Dayen wrote in his article, "How the Trump Tariffs Assist Monopoly":
“Grocery suppliers whose sourcing or manufacturing is overseas have clearly incurred costs on its products, but hardball like this would mean they would have to compensate for losses with other retailers."
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Unsurprisingly, Dayen had to tell his readers, "Albertsons did not respond to a request for comment" for his piece.
The writer is completely missing the point here. It does just the opposite, proving that, no, tariffs don't automatically raise prices for consumers. This is the free market/capitalist system, where business owners have choices on how they run their stores. Keep in mind that U.S. companies that partner with overseas suppliers have had time to plan for just this possibility, when the then-Republican presidential candidate Donald Trump ramped up talking about tariffs during the 2024 election.
Playing hardball is what healthy companies that want to stay in business do. You might recall my story about Kroger, the top grocery chain in the country, seeking to merge with Albertsons in 2022. After lawsuits caused it to fall through, neither of them decided to just roll up in a ball and close up shop.
That fact, possibly more than anything, is what really burns up these anti-capitalism leftists.
Editor's Note: President Trump is leading America into the "Golden Age" as Democrats try desperately to stop it.
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