One of Democrats’ top priorities now that they have captured the House and Senate is investigating sector-wide price structures, including food, and how companies justified raising input costs connected to tariffs, supply chain disruptions or geopolitical tensions.
Affordability remains a critical concern for consumers. Nearly all voters (nine in 10) are worried about the cost of gas, groceries, utilities and healthcare, according to data cited by Washington DC-based law firm Covington & Burling LLP which specializes in business and regulatory law.
Price hike justifications across the industry are divided.
Congressional Democrats and regulatory watchdogs argue that companies must be held accountable for artificially inflating and sustaining higher cost of goods even after supply chain pressures subside. Whereas, organizations that raised prices argue that price hikes are a direct response to increased input costs, labor shortages and shifting trade policies – like tariffs – which naturally inflate the cost of goods.
Companies should prepare for document requests and pricing scrutiny
As Democrats prepare for investigations, CPG manufacturers should assess their internal pricing structures and clearly justify whether recent or upcoming price increases are a direct result from tariff-driven input costs, according to Covington & Burling
“Congressional findings can lead to referrals to the Department of Justice, the Securities and Exchange Commission, and state attorneys general, so responses should be handled with those risks in mind. False or misleading statements to a congressional committee can also create independent criminal exposure under 18 U.S.C. § 1001,” Covington & Burling wrote in a recent blog post.
While the current Congress has less than two months before the incoming 120th Congress starts Jan. 3, 2027, companies should begin assessing their exposure to tariff relief now.
This means preparing for document requests around pricing decisions, margins and contacts with the Trump administration connected to tariffs – in addition to coordinating legal teams. Whether or not businesses’ motives behind raising prices are lawful, congressional Democrats are expected to earn public trust through high-profile, visible investigations, according to Covington & Burling.
“The Democrats with subpoena power, absolutely can subpoena companies or other third parties to say, ‘Give us your communications with the White House. Give us your communications with HHS,” Angelle Baugh, congressional investigations lawyer at Covington said.
How will the midterm elections impact the food & beverage industry?
Take a deep dive into the potential implications of the blue wave that flipped the House and Senate to Democrats control by exploring our ongoing coverage:
Democrats face grocery affordability test as one-third of shoppers cut meals - As Democrats prepare to take control of Congress, new dunnhumby research shows mounting financial pressure is chaing how Americans eat and shop
Affordability, health and trust: What the midterms signal for food manufacturers - As Democrates take Congress, food companies face a new competitive advantage: trust
Grocery taxes, soda taxes and school meals: How voters decided - Food-related ballot measures delieverd mixed results, with wins for Arizona's grocery tax cap and Berkeley's soda tax increase as California's billionaire tax trials
Nestlé’s Hot Pockets named the most bipartisan food in the US by YouGov - Hot Pockets and Kroger lead their categories in YouGov’s 2026 bipartisan brand rankings. See where Democrats and Republicans agree on food and grocery.
US midterms: Should European bakers build or ship? - European bakers weighing US expansion must decide whether producing closer to customers will pay off if tariffs change
What does the midterms result mean for F&B outside of the US? - What happens in the US has global implications, and the US midterms result will mean that changes are afoot
New laws on the horizon?
Long term, the results of some of these investigations could bring new laws.
“Congress is not merely focused on whether you broke the law. Congress is in the business of changing the law,” said Perrin Cooke, congressional investigations lawyer at Covington.
While the President still holds the power to veto proposed laws, Congress can override a presidential veto by a two-thirds vote in each chamber. Although it is “unlikely” that President Trump will sign bills introduced by Democrats, the hearings have potential to drive corporate change, Baugh explained.
“The mere act of conducting an investigation and bringing scrutiny to an issue can often have a real direct impact on how corporations behave,” Cooke added.
With a Democrat-majority in both chambers, food businesses should expect more activity from committees that previously “haven’t typically been the most aggressive of oversight committees,” Cooke said.
Adding to increased committee engagement, House Democratic Leader Hakeem Jeffries confirmed the formation of five affordability working groups, which includes a Groceries and Goods group, to set policy agendas.
Tariff refunds and ongoing lawsuits could draw additional attention
Companies importing certain raw ingredients, packaging materials and agricultural commodities experienced slimer margins due to the Trump administration’s imposed tariffs. Tariff refunds from the International Emergency Economic Powers Act (IEEPA) are being issued to affected importers after the Supreme Court struck down President Trump’s mandate.
However, the gap between companies receiving IEEPA refunds is wide.
The IEEPA refund process posed challenges for small- to mid-sized companies due to the complex application process, limited legal resources and narrow time window to submit after liquidation, experts say. For multinational companies with in-house legal teams, companies have received multi-million-dollar refunds, including Target’s near billion dollar reimbursement.
At the same time, the Trump administration faces multiple lawsuits from state attorneys general for additional tariffs under sections 122, 201 and 301 of the Trade Act of 1974.
