Retailers Beg Federal Judge To Block Mamdani’s ‘Predatory’ Grocery Monopoly

A coalition of grocery stores is calling on a federal judge to block the next step in Mayor Zohran Mamdani’s $70 million public grocery store project, arguing that the plans for taxpayer-subsidized stores offering steep discounts will monopolize the food market.Judge Jennifer L. Rochon, a Biden appointee, heard arguments Thursday in the antitrust case brought by National Supermarket Association, City Fresh and R&E Corporation against the City of New York. She has yet to rule on the grocers’ call for a temporary injunction. The food retailers are asking Judge Rochon to block the city from choosing contractors to operate the first two stores of its NYC Groceries initiative, which are slated for locations at East Harlem and the South Bronx. As The New York Sun previously reported, the selected Manhattan location is surrounded by grocery stores, including a City Fresh location one block away. According to the grocers and their attorney, the America First Policy Institute’s vice chair for litigation, Richard Lawson, the city already violated Section 2 of the Sherman Act when it issued a request for proposals seeking grocery store operators. Now, the judge should enjoin the city from selecting a contractor before they sign a contract that would effectively embroil the selected company in a conspiracy to monopolize.The city aims to build one taxpayer-subsidized store in each borough by the end of Mr. Mamdani’s term, with the first scheduled to open next year. Mr. Mamdani previously announced that NYC Groceries will offer a basket of kitchen staples including all produce, meat, seafood, eggs, milk and more at prices that undercut private competitors by 30 percent. The city will cover overhead costs such as rent and utilities for the public grocery stores to enable the savings.“A tax-supported discount designed to undercut competitors is precisely the type ofpredatory pricing scheme prohibited by the Nation’s antitrust laws,” the grocers said in their complaint, filed in September.While a private competitor looking to corner the grocery market would be limited by its own need to cover costs, “none of those constraints applies to the Defendants’ scheme, because the City can operate the stores at a deficit indefinitely and no competitor would ever be able to compete,” they argue.The city’s attorney, Daniel Kuo Crandall, told Judge Rochon during Thursday’s hearing that the NYC Groceries program “is intended to be complementary to existing food retailers, not to replace existing food retailers,” and that delaying the program would harm New Yorkers in need of the cost-savings it will offer, Courthouse News Service reported. “Competition between the public and private sector can still benefit consumers and still be the type of competition that is supposed to be protected by the antitrust laws, and certainly should not be inhibited by any of the antitrust laws,” Mr. Crandall said.The National Supermarket Association’s suit joins a class action filed by the Multicultural Business Coalition in August, which claims that the Mamdani administration is violating the civil rights of small business owners — many of whom are members of protected minorities — whose corner stores and bodegas are threatened by NYC Grocery stores.

Retailers Beg Federal Judge To Block Mamdani’s ‘Predatory’ Grocery Monopoly

Retailers Beg Federal Judge To Block Mamdani’s ‘Predatory’ Grocery Monopoly

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