We all notice that when we go to the grocery store, our food bill is much higher than before the pandemic. It has remained high for most commodities. The highest increase in food prices occurred between 2022 and 2023, a 25 percent increase. Although wages have been increased overall, the percentage of food purchases is higher in family budgets. The percentage of budgets devoted to food particularly affects those in lower-income groups. Food banks in all cities are seeing increased demand due to this rise.
Food prices are driven by multiple factors such as energy costs, wages, transportation, climate change, political disruptions such as wars, and retailing. One factor that has inflated costs is the oligopoly of a few food processing firms and corporate greed, given the term “greedflation.” According to an article in Portside, a Progressive publication, only a few companies control all aspects of the food industry. We see all the brand “choices” owned by a few mega food companies, which also wield political power through lobbying Congress. These food processing firms have Political Action Committees (PACs) such as Kroger, which contribute to both parties, but more to Republicans. Republicans tend to blame the party in power and the government bureaucracy to divert attention from corporations, their true masters. Inadequate enforcement of anti-trust and price gouging laws have allowed mergers that limit competition and allow prices much beyond their expenses. The increased profits benefit CEO salaries and stock owners, but not employees. None of the better conditions for food processors such as reduced energy costs and stabilization of the supply chain have been passed on to consumers.
“It’s a system designed to funnel money into the hands of corporate shareholders and executives while exploiting farmers and workers and deceiving consumers about choice, abundance, and efficiency,” said Amanda Starbuck, policy analyst at Food & Water Watch, in the Portside article.
The “mom and pop” supermarkets or locally owned ones have become fewer, with major grocery store companies dominating the market: Walmart, Amazon, Costco, Kroger, and Ahold Delhaize (which owns Food Lion, Giant, etc.), as reported by the Groundwork Consortium and Progressive Grocer. Honorable mentions include Albertsons, H.E.B. (mostly in Texas), and Target.
In their report, the Groundwork Consortium (a non-profit organization seeking equitable economic policy), titled "What’s Driving the Rise in Grocery Prices – and What the Government Can Do About It," details reasons for food price increases and offers policies to lower them. The report notes that food prices have risen more than the overall rate of inflation since 2020. It states, “Although supply chain issues and increased production costs have played a role in rising grocery prices, certain manufacturing and retail corporations have also taken advantage of the recent global inflation surge to raise their profit margins.” These increases were particularly pronounced in meat processing, beverages, and snacks.
The Biden Administration initiated a Strike Force in March 2024. On August 1, 2024, the Federal Trade Commission initiated a drive to address price gouging, including grocery stores. FTC Chair Lina M. Khan stated in a speech announcing the Commission’s efforts to curb price gouging, “Often, we get taught that the prices people pay are just a reflection of supply and demand. But sometimes businesses can use their power to unfairly inflate prices—just because they can.”
At a recent hearing of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, U.S. Senator Elizabeth Warren (D-Mass.) called out the food industry for monopolization and price gouging.
Senator Warren stated:
Corporate profits rose five times faster than inflation between 2020 and 2022. Kraft-Heinz, which sells everything from Oreos to pasta sauce to coffee, increased profits by 448% over 2022. Cal-Maine, the largest egg producer in the U.S., increased profits by 718%. In fact, for most of 2023, corporate profits drove over half of inflation. Now, that hasn't stopped Big Food from pulling out another trick: Jacking up prices was not enough. So, food companies have decided to quietly shrink the size of products, lobbing off a few inches here, a few chips there, a few cookies somewhere else. This “shrinkflation” is all about deceiving customers so that corporations can pad their profits. The CEO of the snack company Utz admitted, calling shrinkflation, “the path to higher margins.” So, it seems like we've lost the basic principle of knowing how much something costs before we pay for it.
Warren had earlier admonished major grocery market chains for increasing prices to consumers and is the sponsor of the “shrinkflation” bill in the Senate.
The creation of food processing and grocery store oligopolies, food companies' influence in Congress, price
increases, and exploitation of consumers have the ring of the Gilded Age.
Attributed to Mark Twain it is stated, “History doesn’t repeat itself, but it
often rhymes.” Twain never stated this but said something similar. Twain was a
critic of the extravagant wealth of the rich of the early 1900s. Similar to
these times, we have those who are speaking out against the oligarchy such as
Warren, Sanders, President Biden and now V.P. Kamala Harris.
In recent rallies, Harris has stated she will stop price gouging of food and take on corporations. There has not been any policy statements or mention of ongoing activities. This has perked up the ears of progressives, but the lack of substance is disappointing. The Republicans have no policy on how to reduce food prices.
The time is now for the Harris campaign to pivot to the real issues facing the American public and decrease the usual fluff. It would not be a bad idea to consult Warren and Sanders and get them onboard. Sidelining progressives, which is a significant part of the Democrat Party and catering to the establishment is not a good ploy. This is how we got Biden and not Senator Sanders in 2020. The Progressive message resounds with the American public and is the path for a better future for all Americans.
References:
Economic Research Service, U.S. Department of Agriculture. "Food Prices and Spending." Last modified May 2024. USDA ERS - Food Price Environment: Interactive Visualization
Economic Research Service, U.S. Department of Agriculture. "Summary Findings." https://www.ers.usda.gov/data-products/food-price-outlook/summfindings/.
Feeding America. "Mind the Food Gap 2024." https://www.feedingamerica.org/sites/default/files/2024-04/2024_MindTheFoodGapReport.pdf.
Federal Trade Commission. "Remarks by Chair Lina M. Khan, Strike Force Public Convening." August 1, 2024. https://www.ftc.gov/news-events/news/speeches/remarks-chair-lina-m-khan-strike-force-public-convening.
Food & Water Watch. "Why Anti-trust Laws Matter More than Ever in Agriculture and Food." May 2023. https://www.foodandwaterwatch.org/2023/05/why-anti-trust-laws-matter-more-than-ever-in-agriculture-and-food/.
Groundwork Collaborative. "What’s Driving the Rise in Grocery Prices – and What the Government Can Do About It." 2024. https://groundworkcollaborative.org/reports/whats-driving-the-rise-in-grocery-prices-and-what-the-government-can-do-about-it/.
NPR. "Inflation Food Prices Grocery Supermarket Wages." July 12, 2024. https://www.npr.org/2024/07/12/nx-s1-5037875/inflation-food-prices-grocery-supermarket-wages.
OpenSecrets. "Food Processing & Sales PACs Contributions to Candidates, 2023-2024." https://www.opensecrets.org/industries/pacs/food-processing-sales.
Politico. "What's Harris' Plan to Fight High Food Prices?" August 5, 2024. https://www.politico.com/newsletters/weekly-agriculture/2024/08/05/whats-harris-plan-to-fight-high-food-prices-00172585.
Progressive Grocer. "PG 100: Ranking the Top Food Retailers in North America." May 2023. https://progressivegrocer.com/pg-100-ranking-top-food-retailers-north-america-2023.
Tampa Bay Times. "Trump Made Claim About Food Prices Under Biden: Fact-Check." February 25, 2024. https://www.tampabay.com/news/politics/2024/02/25/trump-made-claim-about-food-prices-under-biden-fact-check/.
Time. "Why Grocery Prices Keep Going Up—and What You Can Do About It." January 11, 2023. https://time.com/nextadvisor/banking/saving-money/why-grocery-prices-keep-going-up/.
Urban Institute. "Food Insecurity Increased for the Second Straight Year in 2023." April 2024. https://www.urban.org/research/publication/food-insecurity-increased-second-straight-year-2023.
U.S. Senator Elizabeth Warren of Massachusetts. "ICYMI: At Hearing, Warren Calls Out Food Industry for Price Gouging, Urges Action to Combat Unfair Pricing Practices." Press release, May 3, 2024. https://www.warren.senate.gov/newsroom/press-releases/icymi-at-hearing-warren-calls-out-food-industry-for-price-gouging-urges-action-to-combat-unfair-pricing-practices.
The White House. "ICYMI: Target, Walmart, and Other Grocery Chains Heed President Biden’s Call to Lower Prices." Statements and Releases, May 24, 2024. https://www.whitehouse.gov/briefing-room/statements-releases/2024/05/24/icymi-target-walmart-and-other-grocery-chains-heed-president-bidens-call-to-lower-prices/.
Yahoo Finance. "Greedflation Caused More Than Half of Last Year's Inflation, New Research Says." (https://finance.yahoo.com/news/greedflation-caused-more-half-last-100000899.html?fr=yhssrp_catchall)
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