Food & Climate
Countries around the world have been suffering from rising commodity prices, especially food, for years for many reasons related to the Russia-Ukraine war, climate change, and COVID-19, but what many consumers do not realize is the role played by food monopolists everywhere in this crazy rise in prices.
In Egypt, the Competition Protection Authority announced the filing of a criminal lawsuit against 162 companies producing broiler chicks, along with the “Poultry Producers Union”, due to the proven agreement between them to set the selling prices on a daily basis, which affected the prices of chicks and poultry in Egypt, and their arrival to the consumer at exaggerated prices.
The Authority said in a statement obtained by “Food & Climate” platform: “the Authority has proven through inspections that violators set the prices for selling broiler chicks to poultry farmers, and exchange confidential commercial information, such as: the quantities of chicks available in the market, implementation prices, raw materials, feed, demand and other basic data, which led to an increase in chick prices by numbers that do not reflect their real price, and in an exaggerated manner in the past period, and violators achieved monopolistic profit margins at the expense of the Egyptian citizen, who has increased financial burdens on them”.
The Authority was able to reach evidence confirming that violators set a minimum selling price in a way that ensures limiting competition and leads to reducing the options available to farmers in obtaining better prices and offers, which harms the freedom of competition in the Egyptian market.
The Authority also proved the involvement of the General Union of Poultry Producers in the agreements that stipulate the determination of the selling prices of broiler chicks by agreement and the assistance and incitement to complete them by adhering to what was agreed upon between the violators in determining their average prices. This contributed to giving credibility to these prohibited agreements, and their continuation for long periods of time, which led to an increase in prices for poultry farmers and thus reflected in an exaggerated increase in poultry prices for the final consumer.
Due to the increase in the prices of broiler chicks, poultry and eggs in Egypt in recent months, the government decided to open the door to imports at the end of last January.
Food monopolists in China and US
Food monopolists have one goal, which is to profit at the expense of others, and the matter is no different whether they live in a rich or poor country.
While regulators have extended an antitrust “rectification period” for Chinese food-delivery giant Meituan without giving a clear time frame for when regulatory scrutiny will end, “Nikkei Asia” reports, citing unnamed sources 3 days ago, food monopolists are main reason experts’ criticism for authorities in US, especially in meat markets.
Meituan’s rectification period, which was supposed to end last October, was extended as the company continued seeking to block restaurants from joining other delivery platforms, Nikkei cites a source as saying.
US has recently become a net importer in terms of the value of agricultural commodities. Increasingly, to older farmers, it doesn’t seem worth it to produce food anymore. The U.S. cattle herd is at its lowest point since 1951. America isn’t just de-industrializing in terms of manufacturing, we are becoming a country that increasingly imports our food as well.
One of the big reasons, of course is monopolization. The middleman takes the value, so domestic producers increasingly see less and less reason to produce, according to Matt Stoller, the Research Director for the American Economic Liberties Project.
For instance, today, JBS, National Beef, Tyson, and Cargill control 80-85% of cattle processing, with the rest spread among a smaller assortment of firms. But that percentage understates the concentrated nature of the industry, because cattle is a regional business. You can’t ship your cattle across the country, you send it to the local processing plant, and you usually have one, maybe two choices, according to “The big news letter”.
Also, the bacon in your BLT now costs nearly twice as much as it did 15 years ago, but inflation is only part of the reason. Broadly speaking, food and drink prices only grew by about 50 percent during that time. So, what’s up with the meat?
The answer may have to do with Agri Stats, a small data venture based in Indiana. In 2023, the Department of Justice, backed by a coalition of state attorneys general, sued the company, accusing it of violating the Sherman Antitrust Act by enabling the exchange of anticompetitive information, leading to artificially high meat prices, according to “Mother Jones”.
Prices don’t decrease
On October, the nation’s antitrust agency in South Africa, said that food producers and retailers have been slow to pass on the effects of declining cost pressures to cash-strapped consumers, an issue that may warrant further investigation.
Cost pressures are easing because of an end to rolling power outages, the rand’s strength against the dollar and declining fuel costs, the Competition Commission said in a report published October 4. Still, essential-food prices “remain high and are increasing at a rate that is unaffordable for low-income households”, according to “engineering news“.