Our Food Is Being Hijacked by Monopolizing Corporations

Truthout talked with Wenonah Hauter about her exposé on how the food industry is becoming a dangerous monopoly of corporate interests.

Mark Karlin: One of the fascinating points you detail in your book is how the "natural foods" marketplace has: 1) become dominated by a few big chain stores (of course "Whole Foods" leads the pack) and distributors; and 2) many of the items that they sell are no more natural than a conventional chain supermarket, just more expensive. Can you elaborate on that?

Wenonah Hauter: Over the past 20 years, Whole Foods Market has acquired its competition, including Wellspring Grocery, Bread of Life, Bread & Circus, Food for Thought, Fresh Fields, Wild Oats Markets and others. Today the chain dominates the market because it has no national competitor. Over the past five years its gross sales have increased by half (47 percent) to $11.7 billion, and its net profit quadrupled to $465.6 million. One of the ways it has achieved this profitability is by selling conventional foods under the false illusion that they are better than products sold at a regular grocery store. Consumers falsely conclude that these products have been screened and are better, and they are willing to pay a higher price.

The distribution of organic foods is also extremely concentrated. A little-known company, United Natural Foods, Inc. (UNFI) now controls the distribution of organic and natural products. Publically traded, the company has a contract with Whole Foods and it is the major source of these products for the remaining independent natural food stores. This relationship has resulted in increasingly high prices for these foods. Small manufacturers are dependent on contracts with UNFI to get their products to market and conversely, small retailers often have to pay a premium price for products because of their dependence on this major distributor. Over the past five years, UNFI's net sales increased by more than half (55.6 percent) $5.2. billion. Its net profit margin increased by 88 percent to $91 million.

Mark Karlin: We have this great national myth of the family farmer putting food on our table. What's happened to the family farmer as the consumer food industry continues to shift to a few behemoth corporations?

Wenonah Hauter: Ever since the Reagan Administration pulled federal anti-trust cops off their beat, the federal government has been allowing giant mergers between competitors. As a result, massive consolidation has taken place in the food industry, giving the meatpackers, grain companies, food processing conglomerates and the grocery industry unprecedented economic power. These companies stand as a bottleneck between fewer than a million farmers and more than 300 million consumers. They lower the prices that farmers receive and increase the prices that consumers pay, keeping more of the profits for themselves. ...........................(more)

The complete piece is at: http://truth-out.org/progressivepicks/item/14783-our-food-is-being-hijacked-by-monopolizing-corporations