Monopoly of the Grocery Aisle 🌽

July 19, 2021

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A new report by the Guardian reveals just how consolidated the U.S. food supply chain has become. At the same time, the corporations that control the supply chain have increased their reliance on government assistance for their profits. While Congress sorts out how to rein in anti-competitive behavior and media attention focuses on the tech giants, we’re choosing today to look at the food industry's political and financial power that inevitably plays out in your grocery bill each week.

The Illusion of Choice

While you might find the variety of your cereal aisle options impressive, if not overwhelming, behind those cleverly distinctive boxes are only a handful of companies (Kellogg’s, General Mills, & Post, more specifically). For any industrious hipster who turns a home-brew kit into a viable independent brewery, chances are, once it has made its way to the beer aisle, Anheuser-Busch owns it. For meat processors, four (4) multinationals hold 80% of the industry, as opposed to 33% 40 years ago.

Farmer. Legislator. Lobbyist.

Government subsidies for commodities (mainly corn, wheat & soybeans) have led to less diversity in crops while also flooding the market, leading to subsequent price drops. These dynamic benefits corporations, who buy these crops for cattle feed and corn syrup additives, among other uses. Meanwhile, it’s not just food production that is consolidated, as just a few grocers have now reached 65% consolidation of the grocery market. Major chains like Wal-Mart & Kroger’s receive 82% of all food stamps, amounting to $64BN in taxpayer dollars. With so much money at stake supported by the government, the food industry SuperPACS have increased campaign contributions roughly six-fold in the past 30 years.

Inflation in your grocery bill

As inflation plays out in labor and transportation costs for these huge multinationals, due to bottlenecks in the supply chain and the reopening of the economy, we see a swift willingness across the board to increase consumer prices to mitigate the impact on the bottom line. Consumer prices for food have been steadily rising, from 0.6% in May to 0.9% in June, as reported by Yahoo Finance.

As the Biden administration aims to strengthen antitrust laws, we'll be seeing more from this industry's most powerful figures.

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