Colorado lawmakers back bill targeting price gouging, especially in grocery stores

Colorado grocery stores and other sellers of “necessity” goods would be prohibited from “unfairly or unconscionably” raising prices on their products under new legislation proposed by state lawmakers.

The measure, House Bill 1010, is part of a push by lawmakers of both parties this year to address Colorado’s high cost of living. The bill would expand a state law prohibiting price gouging during disasters to more broadly bar the raising of prices on certain products by 10% or more in a 90-day period.

Doing so could constitute a deceptive trade practice, and the Colorado Attorney General’s Office or local district attorneys could then investigate to determine the cause of the price hike.

The proposal also follows the economic fallout of the COVID-19 pandemic, when prices — particularly for food — rose sharply.

“There’s a lot of reasons why prices go up, but greed is clearly one of those reasons,” said Rep. Yara Zokaie, a Fort Collins Democrat and the bill’s primary sponsor. “What we do see is market conditions cause prices to go up, and then you have greedy corporations that take advantage of that, and they hide behind those market conditions.”

The legislature passed an anti-price gouging bill in 2020, in the early days of the pandemic. That bill covered building materials, food, fuel and emergency supplies, among other “necessities.” But it limited the law to apply only during officially declared disaster periods — like the pandemic.

Zokaie’s bill would remove that time-specific limitation, meaning it would be illegal to raise prices by 10% or more during any three-month period. It would also exempt sellers who show that they raised prices because of increases from their suppliers or because of other “direct costs” they had to shoulder. Her co-sponsors are fellow Democrats Rep. Kyle Brown, from Louisville, and Sen. Mike Weissman, from Aurora.

Though Zokaie said she wanted to specifically regulate items sold in grocery stores, the proposal would still cover the same products as the 2020 law. It would also define necessities to mean “goods and services that are necessary for the health, safety, and welfare” of the public.

A May report from the Federal Trade Commission about food prices during the pandemic showed that “food and beverage retailer revenues increased to more than 6 percent over total costs in 2021,” higher than their previous peak in 2015.

That trend continued into the first three quarters of 2023. The commission argued that its findings cast “doubts on assertions that rising prices at the grocery store are simply moving in lockstep with retailers’ own rising costs.”

Though price increases have cooled in Colorado and nationally, a December presentation from state economists showed that food inflation remained higher than general inflation. The increase was more dramatic during the pandemic, when food prices rose nearly 8% in 12 months.

Zokaie’s bill drew winces from the Colorado Competitive Council, a business and industry lobbying group.

Rachel Beck, the organization’s executive director, said she understood the intent of the bill and the concerns it seeks to address. But she said she hoped lawmakers would narrow its language, and she raised concerns in particular about fuel and energy prices.

As for Zokaie’s allegation that “corporate greed” has driven price increases, Beck said the charge was “such a broad statement that it’s difficult to address.”

“You really have to take a holistic look at why those things are happening,” she said, “and a lot of (the reasons) are national factors, a lot are supply-chain issues — we’re still feeling that even this far out of COVID. Some are policy choices.”

Beck said she was pleased that Zokaie was most concerned about price gouging in grocery stores, which Zokaie said included not just food but products like baby formula or diapers. Beck said her group “can work with that.”