Every time you visit a grocery store, mini mart, or coffee shop, you’re most likely handing your money over to a member of a powerful food corporation that has quietly and efficiently — along with a few others — become one of the largest, most powerful, and most damaging in America. Because of that, our food choices have become increasingly narrow, as the industry is dominated by a small handful of companies.
Grocery giants have grown to wield considerable amounts of power and influence over manufacturers, farmers, and even customers. The combined influence of the agricultural and food manufacturing industries have a very far reach — so far, in fact, that they have a heavy hand in dictating policies concerning things like GMO labels, and even what is included in school lunches for the nation’s youth. As the grocery market has consolidated, the domino effect cascaded over into other areas, like food manufacturing and production. With consolidation has come rising prices and fewer choices, all part of a calculated effort of a few food cartels raking in massive profits while government turns a blind eye and the public remains mostly in the dark.
Companies like Wal-Mart have become grocery behemoths, spending unfathomable amounts on bulk grocery items to turn around and sell to consumers. As one of the largest consumers of bulk food items, Wal-Mart and others have gone on to dominate the industry, and hold influence over food production companies. The result has led to concentration of power and limiting of choice, ultimately damaging to the consumer. The entire industry is, in many respects, run by a handful of food monopolists who use the illusion of competition to take advantage of consumers. Their influence also allows these companies to narrow choices as to where customers shop and even what they can buy.
In other words: sometimes the free market isn’t as free as we’d like to think.
As reported by industry watchdog Food and Water Watch, Wal-Mart alone sold 28.8% of all groceries in the U.S. during 2012. It also found that top companies presided over 63.3% of 100 different types, or categories, of groceries. Along with Wal-Mart, grocery chains like Kroger and Safeway hold several brand-name stores under their umbrella, creating a barrage of pseudo-competitors. Using this illusion as a tool, grocery giants are able to narrow choices and charge higher prices from customers, who often have nowhere else to go.
Not only are the grocers likely run by the same company, the products they sell likely are as well. Companies like PepsiCo, Kraft, and Nestle dominate store shelves, stuffing inventories with products scattered across as many as 22 food categories, according to Finances Online. With dozens of brand names selling the same product, once again the illusion of competition is used to fool consumers into thinking they have a wide variety of options when placing items into the cart. However, oftentimes no matter what brand of product they choose, the money ends up going to the same company.
The money trail goes back even further to giant food manufacturing companies like Monsanto, Cargill, and Tyson Foods. As a 2007 study from the University of Missouri found out, companies like these dominate the agricultural landscape. “The four largest companies controlled 82% of the beef packing industry, 85% of soybean processing, 63% of pork packing, and 53% of broiler chicken processing. In fact, so much consolidation has taken place throughout the food chain that it can be difficult for any one person to fathom the true effects,” the study says.
As the market has consolidated and food monopolies have risen to take over, where does it leave the consumer? In all likelihood, many of us either don’t know or don’t care, other than hearing the occasional horror story about Monsanto or Wal-Mart’s business practices. Even so, anti-competitive behavior, shell companies, and non-competitive branding have more or less gone under the radar for many years. So, why should consumers even care? Most people can get what they need relatively inexpensively, and usually close to where they live. The devil is in the details of the ploys food giants use on consumers to keep their growth steady and shareholders happy.
While the big food companies themselves have said that consolidating makes for smart business to help the consumer, it rarely, if ever, comes to that, according to Food and Water Watch.
“The grocery industry justifies the size of big-box and merging grocery chains as a way to increase efficiency, lower costs and pass savings on to consumers. But most supermarkets just pocket any savings in the form of higher profits, while consumers rarely benefit. The dominant supermarkets can charge consumers considerably more than it costs to put groceries on store shelves, and they have little incentive to pass price discounts on to consumers if they have few or no competitors in a local market,” the watchdog group writes.
As consumers become more and more aware of where their food comes from thanks to new studies, documentary films like Food Inc., and consumer activism, the mammoths of the food industry will come under fire for their monopolistic and undesirable business tactics. By using a variety of marketing ploys like fake competition, multiple brands of identical products, and casino-like atmospheres, powerful food cartels have been allowed to come to power without so much as a complaint from the general public or the government. Unless the issue is addressed in the near future, the way we get food to our table will lead to a continued stream of higher prices and unhealthier choices, if choices remain at all.