"Let food be thy
medicine and medicine thy food." - Hippocrates
Selling food is big business, with big profits. Masses of
farmers and small producers compete to supply a smaller number of processors,
manufacturers, and wholesalers. These supply the handful of large retailers who
sell directly to the global population of consumers.
The current global food crisis is simple to fix. Simple
because all we need is sufficient, healthy food to eat, simple because it's
technically possible to have an abundance of healthy food. Globally, we produce
double the amount of calories required for the current population, or 4,600
kcal edible food per person per day, which is the right amount for the future
peak population of 14 billion. However the world isn't 'being fed'. In fact the
recently published Global Nutrition Report shows that almost all countries are
facing a serious public health risk due to malnutrition. Malnutrition isn't
surprising, given that the chief goal of the majority of players in the food
system, from farmers upwards, is not to produce nutritious healthy foods for
the people, but to make a profit.
In 2011 in the European Union, the largest five retailers in
every country had a combined market share of more than 60 percent in 13 member
states (Austria, Belgium, Finland, France, Germany, Ireland, Luxembourg, the
Netherlands, Portugal, Sweden and the United Kingdom), with market
concentration exceeding 80 percent in both Denmark and Estonia. In most
countries, however, market concentration among two or three major retailers is
the norm. Two supermarket chains—Coles and Woolworths—control over 70 percent
of the Australia’s food retailing sector, while Wal-Mart and Kroger made 43.2
percent of grocery store sales in the United States in 2013. In Canada, 55.5
percent of the grocery and food retail sector was held by three retailers in
2011. Similar consolidation can be observed in South Korea, Brazil, and
elsewhere.
Food retailers’ unprecedented power as buyers within
national and global markets gives them the ability to set the terms under which
the food supply chain operates. Their ability to impose contracts and prices
with tough deadlines is key to understanding the growing demand for sub-minimum
wages in the food industry. In order to meet their obligations, stay afloat
financially and weather the efforts of retailers and processors to lower costs,
producers and suppliers often subcontract labour and other low value-adding
business activities. For example, farmers, who rarely have the labour capacity
to harvest time-sensitive crops, may hire large numbers of workers through
agencies for short periods of time.
These agencies may in turn outsource their activities to a
third party, either because they are unable to meet their obligations or
because they want to take advantage of a lower cost provider. Labour supply
chains operating through multiple intermediaries and stages of subcontracting
are particularly vulnerable to forced labour. Slavery in the Thai fishing
industry, forced labour in American and British agriculture United States and
the United Kingdom agriculture, child labour and human trafficking in the
chocolate industry, and forced labour in palm oil plantations in Malaysia are
just a few examples of the ever-growing number of food commodities produced—in
part or in whole—for supermarkets through forced labour.
Retailers’ hold over global food production and their
ability to command low prices not only breeds cheap, flexible and casual labour
in food production; it also creates the conditions of insecurity under which
forced labour flourishes. Forced workers are not victims of greedy and morally
bankrupt individuals. They are the living reality of a violent economic
environment where food retailers’ rising profits and market power go hand in
hand with food producers’ chronic insecurity and poverty. Tinkering around with
‘ethical’ audits, labour codes and corporate social responsibility has done
little to address the relationship between retail business models and forced
labour. There can be no sustainable solution to forced labour in the food
industry without challenging food retailers’ ever growing power and control
over the conditions of production of the essential elements of life.
US expenditure on
food and non-alcoholic beverages (2012)
$672.6 billion
Total food retail
revenue in 2013
Germany: $204.1
billion (€180.4 billion)
United Kingdom: $146.1
billion (£95.9 billion)
France: $172.7 billion
(€152.7 billion)
Top five global
retailers by retail revenue in 2012
Wal-Mart: $469.1
billion
Tesco: $101.3 billion
Costco: $S99.1 billion
Carrefour: $98.8
billion
Kroger: $96.8 billion
Large food companies are selling more of their packaged foods to America's poor because they have figured out a way to do it at a much higher profit margin. Manufacturers like Kraft are selling food in smaller packages. These granola bars, sauces, cereals, and prepared meals look like they cost less, but actually are far more expensive on a per ounce basis.
ReplyDeleteShrinking package sizes allows Kraft to reach higher profit margins on products, though it won't sell as many as it would in a larger store. For instance, a 12-ounce package of Velveeta Shells & Cheese cost $2.50 at the Dollar Tree store in New York City. Meanwhile, a 2.4 ounce cup cost $1.25. That's 21 cents an ounce versus 52 cents an ounce.
http://www.washingtonpost.com/blogs/wonkblog/wp/2015/02/07/how-big-food-brands-are-boosting-profits-by-targeting-the-poor/?hpid=z5