FWW Report Suggests That Choice at the Grocery Store Is a Mirage
A December 2013 Food & Water Watch (FWW) report titled “Grocery Goliaths: How Food Monopolies Impact Consumers” examines consolidation in the food industry and how this affects “every link in the food chain, from farm to fork.” Analyzing 100 types of grocery products from cereals and soft drinks to frozen meals and crackers, the report suggests that the top four or fewer food companies control a “substantial majority of the sales of each item.” It further contends that the largest food manufacturers often offer multiple brands of the same food product, “giving consumers the false impression that they are choosing between competing products when in fact all the sales can go to the same parent company.”
Noting that during the past few years as food companies and supermarket chains have consolidated, the illusion of choice has coincided with higher grocery bills, FWW Executive Director Wenonah Hauter said, “you might think you’re a savvy shopper, supporting independent businesses when you buy a product from the organic foods aisle of your grocery store, but chances are you’re really being duped by a small handful of grocery industry Goliaths hiding behind an array of brands and pretty packaging.”
The report suggests that “intense consolidation throughout the grocery industry” limits not just where consumers can shop, but what they can buy, and claims that mergers and acquisitions have increased as the economy emerges from the recession. Concluding that consumers have “little chance to make informed decisions and comparison shop in a grocery industry that is dominated by big supermarket retailers and manufacturers,” FWW suggests that government regulators “step in and level the playing field to make sure that there is some semblance of competition and a chance for innovative, small or local food companies to get on store shelves.” To that end, the nonprofit has asked Congress and the Federal Trade Commission to, among other things, (i) enact a moratorium on grocery chain mergers; (ii) reject sales of food companies that increase consolidation; and (iii) launch a federal investigation into the impact of consolidation on price and consumer choice. See FWW News Release, December 5, 2013.
