Currently browsing posts about: Food-industry

In the Atlantic (to which I subscribe), Eric Schlosser writes: Do We Really Want a Food Cartel? 

Mergers and acquisitions have created food oligopolies that are inefficient, barely regulated, unfair, and even dangerous.

He begins with the Federal Trade Commission’s report on what happened to the US food supply during the COVID-19 pandemic: Feeding America in a Time of Crisis: FTC Staff Report on The United States Grocery Supply Chain and the COVID-19 Pandemic.  This report focuses on the hazards of corporate consolidation for workers and consumers.

We see the effects in the grocery store.  Prices are up and executive compensation even more so.

As Schlosser puts it,

When four companies gain a combined market share that is greater than 40 percent, an oligopoly has formed. The prices offered to suppliers, the prices charged to consumers, and the wages paid to workers are no longer determined mainly by market forces. Further, the power these corporations exert within their industries and the economy as a whole leads to a well-documented dynamic: Effective government regulation becomes difficult, whether because state and federal agencies are “captive” or because they are outmatched in terms of resources and personnel.

This brings us back to my post this week about the FDA.  Schlosser describes the agency as “Poorly managed and notoriously reluctant to confront major food companies,” as shown by its inability to get on top of infant formula shortages.

Read his piece and see if he makes the case for his conclusion:

the fight against oligopolies and monopolies won’t be easy. A small number of corporations have tremendous political influence, expensive attorneys, and great skill at rigging markets in ways the public just can’t see.

We all need to pay close attention.

Austin Frerick.  Barons: Money, Power, and the Corruption of America’s Food Industry.  Island Press, 2024.  With an Introduction by Eric Schlosser.

Wow.  This is one important book.

Frerick’s thesis is that a small number of individuals or families have been allowed to accumulate unconscionable levels of wealth by exploiting or getting around laws (mostly legally but sometimes with bribes), pressuring government to collude, and doing everything possible to enrich themselves at the expense of community and worker welfare—all in the name of low food prices for consumers whether or not they are the reality.

Frerick takes on family enterprises in pigs, grain, coffee, dairy, berries, animal slaughter, and groceries.

This is one tough book.  Frerick structures the chapters to describe the rise of the families’ fortunes, how they exploited rules and customs, and how that got government to collude in giving these companies so much market share and power.

I learned a lot from every chapter, so much that I found myself checking references—-these are extensive—constantly to find our where he had gotten information I’d never seen before.

.About Walmart’s payment of low wages to employees, for example,  Frerick writes,

These low wages also obscure a generous hidden subsidy that the company receives from taxpayers. Many Walmart employees depend on government public assistance programs such as Medicaid (health care), Earned Income Tax Credit (a low-wage tax subsidy), Section 8 vouchers (housing assistance), LIOHEAP (energy assistance), and SNAP (food assistance), among others. In 2013, one estimate by congressional House Democrats found that taxpayers subsidized Walmart to the tune of more than $5000 per employee each year….In effect, instead of paying a living wage to these employees, the Walton family shifts the burden to taxpayers.

Not only that, but SNAP users spend a lot of their benefits at Walmart.

With some back-of-the-envelope math, I came up with a rough estimate that Walmart now receives somewhere around $26.8 billion each year from SNAP.

The chapter on JBS, the Brazilian company now one of four companies controlling 85 percent of meat slaughtering, is particularly worth reading for its documentation of the company’s use of bribery to achieve its ends.

If you want to know how corporations control the food supply, start here.

A recent opinion piece in the Washington Post explains why the FDA should establish front-of-package nutrition labeling here and now: These countries are doing nutrition labels the right way

Christina Roberto, Alyssa Moran, and Kelly Brownell contrast the “stop signs you’ll see in Mexico, the Nutri-Score system used in France, or the Health Star Ratings in New Zealand” with the current lack of a system like those in the United States.

The only thing standing in the way: the food industry. It favors a label that displays grams or milligrams of key nutrients along with percent Daily Values — much like the Nutrition Facts Labelcurrently on the back or side of packages. ..By using symbols, colors and simple language, front-of-package labels adopted by other countries have educated people about what’s in their food, helped them make healthier choices and even encouraged companies to reduce salt and sugar in their products.

And here’s Fortune on the same topic, especially Nutri-Score.

This makes me think it’s time to review what’s happening in Europe with Nutri-Score.  I’ve written about this system previously, most recently here and about Its founder, Serge Hercberg’s, fights with the food industry here.

As a reminder, Nutri-Score accounts for nutrients but also sugar, salt, and saturated fat, in a composite grade A (eat) to E (avoid).

The food industry hates it.  For example, an article by authors with ties to industry argues that there is no independent evidence to support the value of Nutri-Score.  This induced Hercberg et al to rebut those points.

In response to some of these criticisms, the Nutri-Score team is updating its algorithm to respond to concerns about ultra-processing, among other matters.  See: Nutri-Score 2023 Update in Nature Food.

And despite the arguments, support for Nutri-Score is growing.  Authors not connected to Nutri-Score recommend it over other types of labeling for adoption by 27 EU nations.  See: Establishing an EU-wide front-of-pack nutrition label: Review of options and model-based evaluation.  Obesity Reviews, 07 February 2024. https://doi.org/10.1111/obr.13719

Nutri-Score is currently used in seven European countries.  It is backed by the European Public Health Association and the International Agency for Research on Cancer.

The food industry can complain all it wants, I’m guessing Nutri-Score is here to stay.  It may not capture all ultra-processed foods, but it comes close and revising the design like this should help solve that problem.

Just before the Christmas holidays, Senator Bernie Sanders (Ind-VT), who chairs the Senate Health, Education, Labor & Pensions Committee , held a hearing: What is Fueling the Diabetes Epidemic? 

The Senator’s Tweet:

Some of the quotes from the Senator’s remarks are amazing.  They need to be said, loud and clear:

• Why is the number of children in America today who have Type 2 diabetes estimated to skyrocket by nearly 700% over the next four decades?
• For decades, in my view, we have allowed large corporations in the food and beverage industry to entice children to eat foods and beverages loaded up with sugar, salt, and saturated fat, purposely designed to be over-eaten,
• The situation has gotten so bad that most of what children in America eat today consists of unhealthy, ultra-processed foods that doctors have told us lead to a higher risk of type 2 diabetes.
• While diabetes and obesity rates in America soar, the food and beverage industry spends billions on advertising to get consumers, including young children, hooked on their unhealthy products.
• This has got to stop. A good place to start? Banning junk food ads targeted at kids.
• This is not a radical idea.
• We must have the courage to take on the greed of the food and beverage industry which, every day, is undermining the health and well-being of our children by pushing extremely unhealthy products which far too often cause obesity and type-2 diabetes.

The hearing began with:

• Chairman Bernie Sanders, I-Vt., prepared remarks  
• Ranking member Sen. Bill Cassidy, R-La., prepared remarks

Witness testimony

• Ashley Gearhardt — Professor of psychology, University of Michigan, Ann Arbor, Mich.
• Lindsey Smith Taillie — Associate professor, Department of Nutrition, University of North Carolina, Chapel Hill, N.C.
• Kasia Lipska — Associate professor of medicine, Yale School of Medicine, New Haven, Conn. 
• Natalie Stanback — Volunteer and parent of a child with type 1 diabetes, JDRF, Lewisville, Texas   
• Aaron Kowalski — CEO, JDRF, New York

Senator Sanders also wrote an op-ed in USA Today: “We can’t allow the food and beverage industry to destroy our kids’ health.

Helena Bottemiller Evich, writing in Food Fix “Bernie Sanders vs. Big Food,” asks why Sanders is doing this now?  She has no answer, but I think its fabulous that he is taking this on and joining Senator Cory Booker in this endeavor.

Diet-related chronic diseases are a big problem for kids as well as adults.

It’s way past time to take on the food industry’s manipulative marketing practices.

Cheers to Senators Sanders and Booker.  We need more of you in Congress.

I saw this posted on X (the site formerl known as Twtter, which I still find to be a useful source of information I would not otherwise know about).

Terrible news. @PepsiIndia @CocaColaCo @Unilever @KelloggsUS
Sponsor the Annual Conference of Nutrition Society of India . What a shame and conflicts of interest! @ICMRNIN @ICMRDELHI @mygovindia @TimothyWSchwab please note Gates Foundation. @RemaNagarajan @chetanecostani pic.twitter.com/iSRhaUVNOb

— Dr Arun Gupta MD FIAP (@Moveribfan) November 25, 2023

I also saw a post from Joes Spicer, head of Nutrition International, announcing its withdrawal of funding for the conference  because of the food industry sponsors.

And then Tim Schwab, whose book, “The Bill Gates Problem,” I cannot wait to get to, sent this:

In India last week, a minor furor erupted over the Nutrition Society of India’s annual conference being so brazenly sponsored by companies like Coca-Cola.  But Coke is only a “gold” sponsor.  The “platinum” sponsor? The Gates Foundation.

For two decades, Gates has partnered closely with corporate interests—from Coca-Cola to Pfizer—and presented them to the world as humanitarian partners. Because the foundation is such an admired and celebrated charitable body, Gates has had a powerful effect on normalizing, institutionalizing and legitimizing corporate partnerships and conflicts of interest throughout science and policy making.

Food and drug companies love to sponsor nutrition conferences.  What better way to convince influential professional researchers and teachers that your products are good for health and nothing should be said about restricting or regulating them.

The role of the Gates Foundation is much less obvious and much more important because of its money and interntional power.  Schwab’s book promises to address such matters.  I will have more to say about it when I’ve had a chance to read it.

In the meantime, nutriton societies oin the U.S. and India too would be more credible if they avoided taking food industry sponsorship.  If they take Gates Foundation money, it had best come with no strings and no implied endorsements.

If F0undatios were really altruistic, they would provide donations anonymously and not expect a quid pro quo.  When they expect a quid pro quo, it’s best to find out exactly what it is.

This week, I’m posting some items that surprised me.  Here’s the first: How to deal with bribery in your supply chain.

Really?  This is an international problem?  Apparently so, at least for the U.K.

We have approximately 160 coudntries from all over the world contributing to our food supply and this can lead to vulnerabilities in respect of fraud and financial crime.

The vulnerabilities:

• Bribery and corruption
• Food fraud such as adulteration and mislabeling
• Dealing with entities on international fraud and sanction lists
• “Dealing with individuals or entities that do not share your own approach to issues such as sustainability and modern slavery.”

This particular article deals with bribery.  A few excerpts from this discussion:

• It is not necessary to show the payment was made with a corrupt motive or intention to persuade or influence the agent; the payment is presumed to have been corrupt if the principal was unaware.
• There is also no need to show the principal suffered a loss as a result of the agent being bribed.
• Given the serious consequences which can flow from bribery (corporate criminal conviction, fines, reputational damage) and the cost of carrying out your own investigation, prevention is clearly better than cure.
• In the food industry, supply chains can be particularly long and complex, with suppliers involved from all over the world; therefore, it is crucial that businesses invest time in getting to know their suppliers.
• The key message is to keep the risk of bribery in mind at all stages of dealing with suppliers and ensure that all counterparties are aware of your organisation’s understanding of how the civil law of bribery can protect and help scrutinise suppliers, so to maintain a robust supply chain with in-built deterrents for rogue parties.

One more thing to worry about if you are in the food business.

If Kellogg’s splitting into two companies and changing its business model makes no sense to you, join the crowd.

Apparently, Kellogg is not selling enough cereal to keep its stockholders happy: ready-to-eat cereal unit sales declined in both 2021 and 2022 by roughly 8.5% and 3.5%,

To try to fix this, Kellogg has split its North American company into two new companies.

• I.  WK Kellogg Co: cereals alone ($2.7 billion in sales in 2022)
• II. Kellanova: snacks and plant-based protein brands ($13 billion).  The company expects 50% of its business to come from five brands: Pringles, Cheez-It, Rice Krispies Treats, Pop-Tarts and Eggo.  It will also sell Kellogg cereals internationally.

Somebody has to explain to me why this will make a difference.

• More focused attention on cereals?
• Hope that some bigger company will buy one of these?
• Stock splits for investors?

Will this do anything for Kellogg’s customer base?  Seems doubtful, but let’s wait and see.

Stay tuned.

I can hardly believe this, and had to laugh when I read all the articles last week about how worried the food industry is about the new obesity drugs.

Imagine: if the drugs really do reduce appetite and interest in food—horror of horrors—people might eat less.

Eating less, as I have pointed out repeatedly, is very bad for the food business.

In Food Politics, I explained how the fundamental purpose of  food companies is to get you to eat more food, not less.

Beginning in the early 1980s, food companies did a better job of creating an “eat more” food environment.

People responded to this environment by eating more calories—lots more—and way more than enough to account for the rising prevalence of overweight and obesity.  Evidence?   See my book with Mal Nesheim, Why Calories Count: From Science to Politics.

When I am at my most cynical, I ask this question: What industry might benefit if people ate more healthfully?

I am hard pressed to think of any—certainly not the food, diet, or diet-drug industries (Novo Nordisk, maker of the semaglutide drug, Wegovy, now makes more than the gross domestic product of Denmark).

The only exception I can think of is not-for-profit HMO’s like Kaiser Permanente, which do better if their patients are healthier (and have no excuse for not paying their workers better).

Anything that helps people eat less and more healthfully is bad news for the food industry, and especially for companies making ultra-processed junk food.

No wonder companies are worried.

Here’s my collection from last week (with thanks to Lisa Young and Michele Simon for making sure I saw these articles):

• Wall Street Journal: America’s Food Giants Confront the Ozempic Era
• Yahoo Finance: Ozempic Is Making People Buy Less Food, Walmart Says
• Bloomberg News: If Ozempic Leads People to Eat Less, Maker of Cheez-It Will Be Ready
• Yahoo Finance: Snack-maker Conagra may tweak portions as weight-loss drugs alter appetites
• Washington Post:  Food, clothing, airlines: Ozempic is coming for these industries and more
• Yahoo Finance: Surge in obesity drugs like Ozempic has pummeled big food stocks. Is it time to eat them up?
• Food Fix:  Why Ozempic makes Wall Street woozy
• PepsiCo: PepsiCo monitoring impact of weight loss drugs, but says early impact on sales is ‘negligible’