Congressman Steve Cohen Complains of Memphis Monopolies to U.S. Attorney General
(Memphis) U.S. Rep. Steve Cohen of Memphis testified in front of the U.S. attorney general, raising concerns of monopolistic practices by Delta Airlines and Kroger.
Cohen said in the House Judiciary Committee hearing that after Delta merged with Northwest, and after Kroger took over former Schnucks stores, Memphians have been stuck with higher prices and fewer choices.
This comes on the heels of Memphians creating discussion through social media sites of their desire for more competition both in the airline and grocery store industries.
Speaking mostly of Delta Airlines, Cohen said, “Now that the merger is in place, what type of enforcement mechanisms does your department of justice have, to ensure competition or try to get competition, and break up what in essence is a monopoly?”
Cohen described how Frontier Airlines left Memphis, giving the impression that they were priced out by Delta.
Now on the eve of Southwest Airlines’ arrival, Cohen said, “We talked to Southwest. They said if we come in, they’re going to be undercut. That’s a monopoly.”
U.S. Attorney General Eric Holder responded by saying that the department has been aggressive in looking into anti-trust violations.
Cohen alleged the monopolies in Memphis undercut competitors only to raise the prices when the competitors are gone.
Holder said, “That’s inappropriate under our anti-trust laws, so that’s the kind of thing that would have impact on consumers, and we would aggressively pursue.”
Cohen said, “Then, can I ask you to look at Memphis?”
(Watch the clip here)
Travelers at Memphis International and Facebook users said they were happy to see Cohen take this issue to a higher level.
Lou Ann Griffin, who sometimes flies out of Little Rock to avoid high Memphis airfares, said, “Somebody needs to [speak up], for sure. It’s been going on for years and years and I don’t guess anybody has ever looked into it.”
Griffin said she didn’t know if the situation was caused by Delta’s hub status, but she said she also felt prices were also high when Northwest had a hub here.
“We had been hopeful for years and years and years that someone might come in that would do better prices,” she said.
Delta Airlines said in a statement: “Airline fares are affected by many factors, including the cost of providing the service, the price of jet fuel, the date and time of purchase, the route traveled, and time, date and season of the flight and the fare class. We offer a wide range of fares in Memphis for both our business and leisure customers.
For our Memphis business customers, Delta’s hub provides the benefit of more convenient nonstop service than would be justified by local traffic alone. The airport overall has nearly 200 nonstop flights scheduled for this summer, including seasonal international service to Amsterdam. That compares with 90 daily flights in Jacksonville, 80 in Louisville, and 60 in Little Rock.”
As for Kroger’s role in Memphis’s food marketplace, some customers have complained of fewer brand selections at higher prices. But happy customers don’t mind having Kroger as one of the few choices in town.
“Still have Wal-Mart, if you don’t like Kroger,” said Amal Suhlil.
Suhlil used to work for a Kroger store, where she said she felt like part of a family. She said customers can still get the same items as they could at a Schnucks.
Still, Twitter and Facebook campaigns by local shoppers show frustration at paying higher prices.
Kroger spokesman Joe Bell said that everyone is entitled to their opinion, and that’s what makes the landscape competitive.
Bell also said that Kroger monitors very closely the pricing and the competition in every market, including Memphis.
He said that if Kroger does not maintain competitive prices, then it will not be in business. People vote with their wallet, and he said that Kroger has to maintain competitive prices.