The true extent of America’s food monopolies, and who pays the price
The winner takes all business models built on network effects in the new age tech businesses are driving monopolisation at an unprecedented scale altogether. However, even preceding them there existed a whole host of monopolies in more traditional sectors such as the one that this piece spotlights – the food industry. The article is more of an infographic with lots of details on profit concentration across the food industry’s value chain. The article then goes on to show how such monopolisation has come at the expense of farmers, workers and the environment alike.
“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.
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.”