New report on ‘grocery cartels’ details abusive monopolies of retailers


According to a new report released Monday by Food & Water Watch, which proposes measures to rebuild the broken American food system.

“The COVID-19 pandemic has lifted the veil on the idea that the current food system offers abundance, efficiency and resilience. “

The information note entitled The economic cost of food monopolies: the grocery cartels– notes that the grocery industry raked in record profits as the Covid-19 pandemic drastically limited restaurant meals and forced more people to cook meals at home.

“Americans, however, have faced rising food prices and widespread shortages of some basic commodities,” the report said. “And while the cost of meat has skyrocketed, the prices paid to farmers have actually gone down, which has triggered a federal investigation. More excruciatingly, frontline workers who filled grocery store shelves or worked in meat processing plants fell ill and died from Covid-19. Yet many companies have limited risk premiums and have instead invested in share buybacks. “

“The Covid-19 pandemic has lifted the veil on the idea that the current food system offers abundance, efficiency and resilience,” say the authors.

The main findings of the note include:

  • Only four companies made about two-thirds of all grocery sales in 2019;
  • The increase in supercentres and supermarket chains coincides with a sharp drop in the actual number of grocery stores – a loss of around 30% from 1994 to 2019;
  • Over 60% of the grocery categories in the report are narrow oligopolies controlled by a few companies or monopolies; and
  • The Kraft-Heinz merger in 2015 turned the conglomerate into a corporate powerhouse that ranks among the top companies in one-fifth of all food categories studied for the report. General Mills, Conagra and Campbell Soup Company also lead several food categories.

“Supermarkets can present a facade of variety and choice, but chances are you will choose between a handful of companies for every supermarket item,” the report says. Its researchers found particularly sharp consolidation in food categories, notably soy milk – in which France-based Danone accounts for 80% of all sales – dips, dominated by the 88% market share of PepsiCo, baby food and yogurt.

“It’s not a broken system,” the publication emphasizes. “It works as it was designed: to channel the wealth of local communities into the hands of shareholders and business leaders. “

“Fortunately, there are alternative models that invest in their workers and the local economy, while increasing the resilience of our food system to shocks like the pandemic,” the authors argue. “A combination of antitrust laws and enforcement and public incentives to help regional food hubs take root can help turn the tide. “

Food & Water Watch Research Director Amanda Starbuck said in a statement that “over the past century, food giants have quietly consolidated their power, removing the resilience of more diverse regional food systems and excluding the local economies of the table. “

“Fortunately, there are alternative models that invest in their workers and the local economy, while increasing the resilience of our food system to shocks like the pandemic.”

“The grocery cartel has created an illusion of choice and efficiency to hide its profits from the American consumer, who are reluctantly asked to trade abundance for resilience,” she continued. .

“We envision a more resilient, just and sustainable American food system than the one we have today,” Starbuck added. “To get there, we have to face the endemic crisis of consolidating the food monopoly on our hands. “

To do so, the report urges policymakers to “stop consolidation in its tracks” by passing laws, including the moratorium on food and agrifood mergers and the Antitrust Review Act; re-establish the Grain Inspection, Packers and Stockyards Administration (GIPSA) – which was eliminated by former President Donald Trump in 2018 – and enforce existing antitrust laws and shatter oligopolies and monopolies.

In addition, the authors call for the creation of more cooperative grocery stores, food centers and local processors. All of this, Starbuck says, “can rebuild our food system from scratch.”

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