Schumer Calls for Federal Probe of Rising Road Salt Prices

With the massive snowfalls that have hit the Lower Hudson Valley Region, local government officials say have come soaring bills for road salt as prices have hit record levels.

U.S. Sen. Charles Schumer, D-NY, said Monday he wants an investigation by the Federal Trade Commission to check for possible collusion and price gouging in the road salt market.

“The fact that Ulster County has seen a 40 percent increase in road salt prices over just five years is outrageous, and it’s time that we get to the bottom of this,” Schumer said. “The bottom line is that if there’s price gouging in the road salt market we need to know about it because that excess cost ultimately gets pushed onto the taxpayer during what are already tough economic times. Higher road salt prices force towns to choose which roads get salted and plowed, and which potholes they can afford to fix during the summer months. The FTC should immediately begin an investigation into this serious public safety issue.”

Schumer said that already cash-strapped municipalities in New York have been forced to buy more salt than typical this year, at record high prices. In Ohio, an Inspector General’s report revealed that two companies had formed a duopoly and successfully raised prices costing towns, cities, and counties millions of dollars, according to Schumer

Schumer visited a salt storage facility in Kingston on Monday as he released a letter to the FTC urging an investigation. Schumer said that across the country — and particularly in New York State — the price of road salt has increased rapidly, and even when adjusting for the rising cost of fuel the numbers don’t add up.

“Road deicing is both a public safety and economic issue,” Schumer wrote. “The public safety issues are obvious. The economic impact is quantifiable – in terms of loss of tax and business revenue from snow closures, one study put the cost to New York at $700 million per day.  Under these circumstances, municipalities across the state can ill afford to skimp on maintaining adequate supplies of road salt.”

Here is the full text of Schumer’s letter to FTC Chairman Jon Leibowitz:

February 7, 2011

The Honorable Jon Leibowitz
Chairman, Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, DC 20580

Dear Chairman Leibowitz,

I write to respectfully request that the Federal Trade Commission investigate whether price-gouging or other anticompetitive practices are behind skyrocketing prices for salt used to melt ice and snow.  Early winter storms across New York State already have exhausted many municipalities’ snow removal budgets.  Replenishing depleted salt supplies at grossly inflated prices is the last thing local governments need in these tough economic times.

Road deicing is both a public safety and economic issue.  The public safety issues are obvious.  The economic impact is quantifiable – in terms of loss of tax and business revenue from snow closures, one study put the cost to New York at $700 million per day.  Under these circumstances, municipalities across the state can ill afford to skimp on maintaining adequate supplies of road salt. 

News reports suggest that salt prices have soared to record highs.  Prices have doubled, and in some cases tripled in recent years.  New York municipalities working overtime to keep roads open in the face of severe winter weather deserve to know why.

Chairman Leibowitz, I respectfully urge you to investigate whether extremely high road salt prices are the result of conduct considered illegal under antitrust or price-gouging laws, and to take appropriate enforcement actions.  New York municipalities already are struggling under severe budgetary constraints.  They should not be slammed further with suspiciously high road salt prices. 

Thank you for your prompt attention to this matter.  I look forward to hearing from you on this issue.

Sincerely,

Charles E. Schumer
United States Senator