Feds Try to Stop Grocery Mega Merger As Consumers Deal With Rising Prices
Record $1 billion Bronx med-school donation; Organ collection groups under investigation
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Morning everyone!
Yep, that’s Monica Lewinsky. She’s the new face of Reformation's workwear collection AND trying to get people to vote at the same time.
The "You've Got the Power" campaign is a collaboration between the fashion brand and vote.org.
Lewinsky said, "Voting is always important, but the stakes are especially high this year with voter frustration and apathy threatening to meaningfully impact turnout."
A press release says: “As a changemaker and activist, Monica has been advocating for women to use their voices and embrace their power for decades.”
It has us walking into Tuesday singing, “I’ve got the power!”
Mosheh, Jill, & Lauren
🛒 FOOD COSTS HIT CONSUMERS: WHAT FEDS AND COMPANIES ARE DOING
How much Americans’ paychecks go to food costs. Via: WSJ.
The US government is suing to block the $25 billion Kroger-Albertsons mega-deal, saying the largest grocery merger in American history will lead to higher food costs and lower pay for workers. The stores claim the deal will do the opposite.
It comes as consumers are struggling with inflation at the supermarket, and many are turning to store-brand groceries over name-brands as a way to save money.
🥣 One idea getting mixed reviews: Kellogg’s CEO suggested eating cereal for dinner to fight rising food costs. Hmmm.
SEE YOU IN COURT
The Federal Trade Commission, along with nine states, wants to stop the supermarket deal, saying it would leave consumers and workers in some regions of the US with little choice or bargaining power.
Since the merger was announced 16 months ago, the United Food and Commercial Workers union, which represents 835,000 grocery workers in the US and Canada, voted to oppose it.
Kroger says merging with Albertsons will help them compete with non-unionized, big-box retailers like Walmart, Amazon, and Costco, which can already use their size to negotiate better prices with manufacturers and suppliers.
PRICES GOING GA-GA
Food costs haven’t eaten up this much of Americans’ paychecks in over 30 years. Newly released USDA data shows that consumers spent 11.3% of their disposable income on food (at both grocery stores and restaurants) in 2022.
Grocery prices have risen by 25% since the pandemic, outpacing overall inflation of 19% during the same period.
Why? Companies are blaming labor shortages, rising minimum wages, supply chain disruptions, and environmental factors.
President Biden and other lawmakers are blaming corporate greed: They are pointing to price-gouging, grocery stores’ profit margins being higher than their pre-pandemic levels, and “shrinkflation” (yes, that Super Bowl ad). That’s when companies reduce a product’s size but charge the same.
Investment strategist Samuel Rines tells the AP: PepsiCo, Kimberly-Clark, Procter & Gamble and others “exploited the rise in costs stemming from supply-chain disruptions and Russia’s invasion of Ukraine to dramatically raise their prices — and increase their profits — in 2021 and 2022.”
At first, consumers seemed willing to pay. Not anymore.
Via: Washington Post
WHAT’S IN A NAME?
Consumers are doing whatever they can to cut costs, with many choosing less expensive store brands instead of name brands. And some companies are feeling the impact.
Unilever, which owns Ben & Jerry’s ice cream and Dove soaps, increased prices 13.3% in 2022 and sales fell 3.6% that year. Last year, prices rose just 2.8% and sales grew 1.8%.
On the Kroger’s website, a 17.3 oz box of Kellogg’s Frosted Flakes is $5.79 while a 26.8 oz box of the Kroger brand cereal is $3.29.
🏥 FEDS INVESTIGATE ORGAN COLLECTION GROUPS FOR POSSIBLE FRAUD
Via: organdonor.gov.
US authorities are investigating some nonprofit organ collection groups that have a monopoly in the multibillion-dollar organ transplant industry. At issue: their billing practices and shortages of desperately needed organs.
HOW IT WORKS
There are 56 organ procurement organizations in the US. They facilitate the transfer of organs, mainly kidneys, from the deceased donors to surgeons at one of the country’s 250 medical centers that perform transplants.
The 56 groups have monopolies over certain areas of the US.
They get paid by the medical centers performing the transplant and Medicare helps cover additional transportation and overhead costs for kidneys. Public and private payers then reimburse the medical center.
There’s more than 103,000 people on the US transplant waiting list, about 88,000 of whom are seeking kidneys.
Bottom line: There are still not enough organs to meet the needs of Americans, but the US has never decertified any these nonprofits that hold the monopolies over certain regions.
New rules from The Centers for Medicare and Medicaid Services, the part of Department of Health and Human Services that licenses the nonprofits to operate, will be able to weed out poor performers beginning in 2026.
SHOW ME THE MONEY
The issues at hand are whether the organ collection groups in at least five states have been over-billing the US, if there have been any kickbacks between the groups, and if they are prioritizing donor’s body tissue (which they can sell for high margins.)
Between 2010-2019, the groups collected organs from 33 deceased donors at VA hospitals, the US’s largest health-care system, when 5,281 people met the criteria to donate.
Part of the investigation is if these groups are prioritizing VA donors’ body tissue — like skin, bone, ligaments, and heart valves — that they can sell for surgeries and other medical procedures over badly needed organs.
🥼 HISTORIC $1 BILLION DONATION TO BRONX MEDICAL SCHOOL — MAKING TUITION FREE
Albert Einstein College of Medicine students woke up to great news: their tuition is covered starting in August. It’s thanks to a $1 billion donation by Dr. Ruth Gottesman, a former professor at the Bronx-based school and widow of a Wall Street financier, which was announced yesterday.
It is the largest-ever charitable donation to a medical school in the country. And she doesn’t want the school’s name to change to hers — which others have done for less.
Why not make it the “Gottesman College of Medicine?” She said the school is already named for the best: “We’ve got the gosh darn name — we’ve got Albert Einstein.”
HOW SHE DECIDED
Gottesman, whose late husband David “Sandy” Gottesman was a friend of Warren Buffett and invested early on in Berkshire Hathaway, researched learning disabilities at Einstein and now serves as chair of its board of trustees.
Her husband died in 2022 at 96. “He left me, unbeknownst to me, a whole portfolio of Berkshire Hathaway stock,” Gottesman said, with the instructions, “Do whatever you think is right with it.”
THE COST OF A MD
Gottesman hopes that the free-tuition will lead to a more diverse group of students. “We have terrific medical students, but this will open it up for many other students whose economic status is such that they wouldn’t even think about going to medical school,” she said.
At Einstein, tuition is over $59,000 a year and nearly 50% of students owed more than $200,000 after graduating.
At most other New York City medical schools, less than 25% of new doctors owed that much.
The donation could also encourage doctors to go into less lucrative fields like pediatrics, where there’s currently a shortage.
NY MED SCHOOL MOVES
New York University announced in 2018 that it would go tuition-free, while Columbia University covers the cost for students with financial needs — both in Manhattan, New York City’s wealthiest borough. Einstein is located in NYC’s poorest borough—The Bronx.
⏳ SPEED READ
🚨NATION
📌 Supreme Court justices appears split on GOP-backed social media big tech laws (NBC NEWS)
📌 Active-duty US Air Force member who set himself ablaze outside Israeli Embassy in DC dies (MO NEWS)
📌 Hunter Biden sees his sobriety as key to keeping Trump from winning (AXIOS)
📌 Activists opposing Biden’s Israel policies urge Democratic voters to vote “uncommitted” at Michigan primary today (MO NEWS)
🌎 AROUND THE WORLD
📌 Prison escapees hijacked boat of missing American couple in Grenada, they were likely thrown overboard and died, police say (NBC NEWS)
📌 Palestinian prime minister submits government's resignation to President Abbas (FOX NEWS)
📌 Navalny was about to be swapped for a Russian prisoner in Germany, an associate says (NPR)
📌 Lockbit cybercrime gang says it is back online following global police bust (REUTERS)
📱BUSINESS, SCIENCE & TECH
📌 Mission cut short: Private U.S. moon lander to cease operations after less than a week after landing sideways (PBS NEWS)
📌 Wendy’s to roll out Uber-style surge pricing for meals (NY POST)
📌 US pharmacy outage triggered by 'Blackcat' ransomware at UnitedHealth unit, sources say (REUTERS)
📌 Berkshire’s boom days may be over as Warren Buffett’s company approaches $1 trillion in value (CNN)
📌 Measles is a 'heat-seeking missile' experts warn as Florida outbreak grows (NBC NEWS)
🎬 SPORTS & ENTERTAINMENT
📌 Diddy accused of sexual assault in 5th lawsuit since November (THE WRAP)
📌 Taylor Swift’s father accused of assaulting photographer (HUFFINGTON POST)
📌 Alec Baldwin's 'Rust' trial on involuntary manslaughter charge set for July (USA TODAY)
📌 “Mary Poppins” U.K. age rating raised to PG due to “discriminatory language” (SALON)
📌 Owner of real ‘Saltburn’ house inundated with visitors inspired by TikTok (CNN)
🗓 ON THIS DAY: FEBRUARY 27
1951: The 22nd Amendment to the Constitution was ratified, limiting a president to two terms in office.
1968: CBS Evening News anchor Walter Cronkite's 'Report from Vietnam' aired, breaking from his usual objectivity to predict that the Vietnam War could end only in a protracted stalemate.
Weeks later, President Lyndon B. Johnson announced he would not run for reelection, influenced by the unpopularity of the war.
1980: The first and only Grammy Award for Best Disco Recording was awarded to Gloria Gaynor's “I Will Survive.” The National Academy of Recording Arts and Sciences eliminated the disco category the following year.
1992: A 16 year old Tiger Woods made his PGA debut at the Nissan Los Angeles Open. [His 15 year old son Charlie Woods will make his debut this week!]