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03/14/2022

Don’t let Congress ban store brands when we need them most.

Zach Lilly
Zach Lilly Deputy Director of State and Federal Affairs

If you have ever walked inside a retail store, chances are you have come across a store brand item, also known as private label, generic or owned brands. Whatever you decide to call these products, you will find them whether you’re at a big box store like Costco and Target, convenient stores such as CVS and Walmart, grocery stores such as Kroger and Thrive Market and even your local small business like hardware store. Tucked away next to a big name brand is a similar version of the product that costs less money. If you’ve had a good month, maybe you reach for the pricier option. If you are like millions of Americans trying to stretch their dollar, you go for the store brand

The choice to buy store brands and spend less money could become outlawed. Senator Amy Klobuchar has introduced the American Innovation and Choice Online Act that would make it illegal for retailers above a certain size to effectively promote and sell  their store brand goods. This means less expensive goods sold online would be more difficult to search for. Good luck finding the option that works best for your family and your wallet. Retailers, terrified of government retaliation, will be forced to cater to big brands instead of their customers.

Store brand goods drive down prices. Drug prices are a prime example of this. When just one generic option enters the market to compete with a brand name, the overall cost goes down 31%. If the number of generics goes up to 6, the price drops 95%. That’s the kind of savings that changes a family’s standard of living. Lawmakers shouldn’t outlaw competition that protects consumers. 

Consumer adoption of store brand goods has never been higher. This is driven by low prices, by increased inflation, and by the thousands of choices that store brands offer consumers. On average, retailers have available 4,500 store brand goods for sale. Target and Walmart have the most store brand SKU’s – 13,220 and 10,673 respectively.

Senator Klobuchar’s bill would also make it illegal for a company like Amazon to package its services together. Again, the government is unfairly targeting standard practices that make life easier for consumers and keep costs low. 

The history of retailers offering store brand goods and services is a long one. Some lawmakers think it’s unique to the Internet Age. Maybe they’ve never had to pinch pennies. The reality is that outlawing a common and popular practice for some but not for others makes no sense. Store brands save Americans money, increase choice and competition, and keep the big guys on their toes.  

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