True extend of America’s food monopolies, and who pays the price

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Investigation shows scale of big food corporations’ market dominance and political power

A handful of powerful companies control the majority market share of almost 80% of dozens of grocery items bought regularly by ordinary Americans, new analysis reveals.

A joint investigation by the Guardian and Food and Water Watch found that consumer choice is largely an illusion – despite supermarket shelves and fridges brimming with different brands.

In fact, a few powerful transnational companies dominate every link of the food supply chain: from seeds and fertilizers to slaughterhouses and supermarkets to cereals and beers. ConAgra, for example, is one of the largest Foodservice monopolies in the United States, chances are that most of your Supermarket shoppings contains items from this giant.

The size, power and profits of these mega companies have expanded thanks to political lobbying and weak regulation which enabled a wave of unchecked mergers and acquisitions. This matters because the size and influence of these mega-companies enables them to largely dictate what America’s 2 million farmers grow and how much they are paid, as well as what consumers eat and how much our groceries cost.

It also means those who harvest, pack and sell us our food have the least power: at least half of the 10 lowest-paid jobs are in the food industry. Farms and meat processing plants are among the most dangerous and exploitative workplaces in the country.

Overall, only 15 cents of every dollar we spend in the supermarket goes to farmers. The rest goes to processing and marketing our food.

The Guardian and Food and Water Watch investigation into 61 popular grocery items reveals that the top companies control an average of 64% of sales.

We found that for 85% of the groceries analysed, four firms or fewer controlled more than 40% of market share. It’s widely agreed that consumers, farmers, small food companies and the planet lose out if the top four firms control 40% or more of total sales.

Our investigation is based on the analysis of market share data from thousands of supermarkets across the US.

“It’s a system designed to funnel money into the hands of corporate shareholders and executives while exploiting farmers and workers and deceiving consumers about choice, abundance and efficiency,” said Amanda Starbuck, policy analyst at Food & Water Watch.

The consolidation runs deep: four firms or fewer controlled at least 50% of the market for 79% of the groceries. For almost a third of shopping items, the top firms controlled at least 75% of the market share.

For instance, PepsiCo controls 88% of the dip market, as it owns five of the most popular brands including Tostitos, Lay’s and Fritos. Ninety-three per cent of the sodas we drink are owned by just three companies. The same goes for 73% of the breakfast cereals we eat – despite the shelves stacked with different boxes.

Big food is getting bigger

For shoppers, it might seem like choices galore at the store, but most of our favorite brands are actually owned by a handful of food giants, including Kraft Heinz, General Mills, Conagra, Unilever and Delmonte.

Kraft Heinz, the result of a $63bn mega-merger in 2015, which was backed by Warren Buffett and a Brazilian private equity firm, appears 12 times in the top 4 firms for groceries, with products ranging from bacon, sour cream and coffee to frozen meat substitutes and fruit juice.

The big firms are helped by so-called category captains who represent leading brands or manufacturers and work with major retailers to decide which products get prominent spots on our supermarket shelves. And then there’s the slotting fees – payments by big-brand manufacturers for eye-catching product placement. This makes it very hard for new independent brands to get a break. And when they do get a tiny foothold, it often doesn’t last.

Farmers squeezed … and desperate

America’s farmers have become increasingly dependent on government aid.

Farmers received $424.4bn in subsidies between 1995 and 2020, of which 49% were for just three crops: corn, wheat and soybeans, according to the Environmental Working Group. Corn subsidies are the largest by a long way – $116.6bn – accounting for 27% of the total. Very little corn grown in the US is eaten these days. Instead, more than 99% goes into animal feed, additives like corn syrup used in sugary junk food and, increasingly, ethanol, which produces toxic air pollutants when burned with gasoline.

It’s a cruel paradox, according to some campaigners, as subsidies incentivise farmers to grow just a handful of cash crops, a practice that floods the market, depresses prices and keeps them hooked on government aid.

 

Source: The Guardian

 

Your blogging friend Ulrich Koepf