Why food prices are so damn high and grocery store billionaires are so damn happy
“One may smile, and smile, and be a villain. ”
~ William Shakespeare, Hamlet ~
GALEN WESTON SMILES A LOT in his TV commercials these days. He should. Weston is 42% richer than he was two years ago—so are all the billionaire-owners at the top of the agribusiness pyramid.
A recent report by Oxfam International found that 62 new “food billionaires” were created during the pandemic. The report also highlights the record profits made by the food industry giants and their CEOs like Galen Weston, the ever-smiling CEO of Loblaws.
Crisis capitalism with a vengeance
The report says food and agribusiness billionaires raised their collective wealth by 42 per cent in the past two years. No great surprise considering they raised food prices by 33.6 per cent in 2021; and are expected to raise them by another 23 per cent in 2022.
All of which is standard operating procedure for giant corporations that can’t wait to latch on to any crisis as an excuse to boost profits.
Cargill, the beef and poultry processing giant, is expected to report record profits this year, surpassing even last year’s record-breaking US$5 billion. Indeed, three members of the Cargill family joined the Bloomberg Billionaires list in mid-April.
Loblaws reported that its first-quarter earnings rose almost 40 per cent, compared to last year.
A few giant corporations
Canada is home to one of the most concentrated food systems in the world.
Cargill and JBS Foods slaughter 95 per cent of Canadian cattle, while Weston Bakeries and Canada Bread account for 80 per cent of the bread market. Loblaws, Sobeys, Metro, Walmart and Costco all hold roughly 80 per cent of grocery market sales.
Consumers are not the only ones suffering the consequences. Farmer’s profits have remained stagnant or declined for decades.
Food price inflation has grown much faster than general inflation for decades. Canada’s general inflation rate is at its highest since 1991, and the food inflation rate in the country has reached 7.4 per cent.
According to this year’s Canada Food Price report, the average grocery bill increased by 70 per cent between 2000 and 2020, and median incomes have not kept pace.
A recent New York Times article on “greedflation” explores the connection between corporate concentration more generally and higher prices. Greedflation occurs when large corporations jack up their prices during times of extreme strife — like during a worldwide pandemic.
The article notes that, although corporate concentration has existed for decades without corresponding inflation, the unique set of circumstances borne out of the pandemic has changed things.
Supply shortages, combined with increased worker bargaining power, have driven corporations to switch from squeezing suppliers to squeezing consumers. Both approaches demonstrate the perils of concentrated corporate power.
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