Consider this an abbreviated State of the Food Union: Four beef firms control over 80 percent of the cattle slaughtered in this country. Two beer conglomerates sell more than 70 percent of the suds we drink. Just two companies peddled more than 70 percent of U.S. soybean seeds in 2015. And a scant three foodservice corporations operate more than 90 percent of the cafeterias in schools, hospitals, and prisons.
In case you’ve missed our coverage on the subject, the food industry is incredibly consolidated—from the farm to the plate and everywhere in between. The phrase “Big Food?” That’s just shorthand for the companies that have been getting bigger and squeezing out the little guy for decades and decades.
But food policy wonks—many of whom have spent the last six months answering questions about what’ll become of good food reform with a shrug and a sigh—may have cause to step into the light and crack open a cold craft beer.
Senate and House minority leaders Chuck Schumer and Nancy Pelosi on Monday published op-eds in the New York Times and the Washington Post announcing the rollout of “A Better Deal,” the party’s most recent pivot toward populism. To announce the new platform, Schumer and Pelosi held an unveiling in Berryville, Virginia—a district NPR reports Democrats would “desperately” like to flip. A Better Deal is, at least on paper, a three-part plan to make prescription drugs cheaper, create new jobs, and yes, crack down on corporate consolidation.
And indeed, the food industry got a whole two paragraphs in the white paper’s “corporate monopolies” section: Dems called out the world’s largest beer company, AB-InBev, and the pending Dow-Dupont, Monsanto-Bayer, and ChemChina-Syngenta mergers as examples of corporate power run amuck.
“[M]any Americans don’t know what we stand for. Not after today. Democrats will show the country that we’re the party on the side of working people — and that we stand for three simple things.” Schumer wrote in his op-ed.
Pundit takes on the seeming left-of-center shift have so far been all over the place: Some say it’s a response to the grassroots success of the Bernie Sanders campaign, some find it a little tepid—less sexy than its fun cousins the New Deal and Square Deal.
But what can politicians actually do about corporate power in the food industry? Are they even asking the right questions? And when are we gonna hear from Schumer about Amazon and Whole Foods?
Consolidation is getting air time on Capitol Hill. “Over the last thirty years, courts and permissive regulators have allowed large companies to get larger … And because concentrated market power leads to concentrated political power, these companies deploy armies of lobbyists to increase their stranglehold on Washington,” reads the second paragraph of A Better Deal. That assessment is at least somewhat accurate: Since the late 1990s, the world has seen some of the biggest corporate mergers in history including Exxon-Mobil, AOL-Time Warner, AB InBev-SAB Miller, and of course, the potential ‘Bix Six’ agrochemical industry mergers.
But even though it’s convenient to blame the faceless “courts and permissive regulators,” neither major political party has really come out with its antitrust guns a-blazin’ during the last three presidencies either (the financial sector being a notable exception). “Under the Obama administration, Democrats took a long time to embrace even much less straightforward and strong language around competition and addressing consolidation in different sectors,” says Leah Douglas, a reporter and policy analyst with the Open Markets Program who researches power, consolidation, and monopolization in the food and agriculture industry.
The small food economy might get a new ally. The Better Deal puts a big focus on increased scrutiny of pending mergers. The plan centers around empowering regulators, requiring big companies to prove their mergers will be good for consumers, and reviewing new goliaths after they merge to make sure they’ve done what they’ve promised—make new jobs, allow fair competition, and so on.
But to address existing consolidation, the Better Deal offers up a 21st century “Trust Buster.” The party proposes setting up an office that fields complaints about anti-competitive activities and recommends investigations to the Federal Trade Commission and the Department of Justice. Remember when we reported on the murmurings of anti-competitive practices over at AB-InBev? (A few examples: Controlling the entire South African hops market, promising free fridges to bars, and a now-defunct distributor incentive that totaled millions of dollars of payouts for promoting InBev over other beers.) Those seem like the kinds of things you’d report to a “Trust Buster” office.
Corporate consolidation and corporate power are two different animals—both political. It’s one thing to win progressive plaudits for preventing high profile mega-mergers. It’s quite another to work on limiting the power corporations already have over shaping and pushing policy change.
“The political power of these enormous companies is also very strong,” Douglas explains. “And that political power manifests through lobbying, and through policy advocacy at the state level, increasingly. So there’s also an opportunity to look at how the power of these companies is being leveraged to change existing agricultural regulations,” she says.
Corporate influence on food and nutrition policy has been under intense scrutiny since the November election. Just last week, we wrote about President Trump’s pick to head the Centers for Disease Control (CDC) and her ties to Coca-Cola. Before that, we covered the pizza lobby’s (apparently successful) campaign to stall menu labeling rules. Monsanto’s allegedly cozy relationship with Environmental Protection Agency (EPA) regulators has been under the microscope in recent months. And remember when we almost had the CEO of Carl’s Jr. for our labor secretary?
It’s much trickier to limit the efficacy of lobbyists on Capitol Hill than it is to prevent, for instance, the great Coke-Pepsi merger of 2020. Still, Douglas sees addressing “food and farming regulations that are being fully repealed at the state and local level, and sometimes at the federal level, often unnoticed except by the people living there” as a good place to start.
The way we talk about monopolies could change. There’s something a little weird about the way the Better Deal positions potential agrochemical mergers like Monsanto-Bayer. It talks about them in terms of their effects on food prices.
“It still retains some of the consumer welfare logic and language that we’ve heard from both parties since the 80s,” Douglas says. Of course, a platform that essentially says “airlines are too expensive, food is too expensive, eyeglasses are too expensive” resonates with a broad cross-section of people who eat and fly. Problem is, corporate consolidation hasn’t necessarily led to higher food prices.
“Many farmers would also say ‘What are you talking about? Food prices are as low as they’re ever going to be in our lifetime,’” Douglas adds. But even though mergers haven’t necessarily meant pricier corn, they can still have an adverse ripple effect on the entire supply chain. “That’s one of the reasons we’re seeing a struggling farm economy: Everything that is happening in the supply chain before the consumer is also so consolidated. The incentives are all crossed,” she says.
So the party line on this one is maybe a little oversimplified. Sure, in same cases corporate consolidation may lead to higher food prices. But a lot of the damage it really causes pretty invisible if you don’t live on a farm or operate a truck. Douglas doesn’t think that should mean the Better Deal is not a big deal.
Because #AmazonWholeFoods. The Justice Department and Federal Trade Commission are well-practiced in scrutinizing the recognizable sorts of mergers that birthed Big Oil, Big Food, and Big Telecomm. Those all involved one company buying or merging with a pretty similar company.
But what happens when a book-merchant-turned-online-retail-behemoth buys a high-end food purveyor? Whole Foods controls just 1.2 percent of the grocery market; Amazon controls 43 percent of all online retail sales. Is it even competing with brick-and-mortar grocery stores?
“It’s a different type of thing than what we’ve seen, which I think is why it’s created a whole storm of think pieces and analysis and reporting because everyone’s trying to figure out, ‘What do we do with this mega thing that we don’t understand?’” says Douglas, adding that her colleagues at Open Markets are putting together ideas on how to regulate what they call “platform monopolies.”
But even though an Amazon-Whole Foods merger may have an unpredictable effect on e-commerce and the food industry as a whole, politicians in Congress have begun to sound the alarm bells. Douglas mentioned that the Congressional Black Caucus has called for more scrutiny of the merger, and Rep. David Cicilline (D-RI), who is a ranking member of the Subcommittee on Regulatory Reform, Commercial and Antitrust Law, has also called for a thorough review of the possible merger’s implications.
Despite the near epic flurry of activity in the White House, the Trump administration has so far failed to move any significant piece of legislation. At a time when headlines about a big new party platform can be overshadowed by a single tweet, it may be that the Amazon-Whole Foods merger and other platform monopolies will represent nothing more than an opportunity for Democratic lawmakers to show some strength. But first, they’d have to seize the mic.