“Only a handful of companies control the cereal market. And the cost to consumer is really interesting because Americans are used to fewer choices. I'm thinking about the impact of Walmart on smaller businesses. The trade-off was that the prices were cheap. But in reality, we are actually paying more because we have less choice.
What's happened is when you have concentrated power over any market, those who have the power get to dictate wages to the workers and also what they pay to their suppliers. And in the food system, that would be farmers, ranchers. And if you look at what's happened in the last 40 years in the United States, we've had remarkably stagnant wages for ordinary Americans and we've had a huge decline in the number of farmers and ranchers and the middleman is able to take the profit.
And that's why you need competitive markets. That's what capitalism is supposed to be about, but what we really have is a form of corporate socialism. And once four companies control about 40% of a market, you don't really have competition anymore because they're able to signal to one another price increases.
They're able to signal to one another how much they want to pay suppliers. A good analogy would be, let's say you want to sell your house. If you're going to sell your house, you want 50 to 60 people really eager to buy it. But if there's only one or maybe two, you're much more likely to get a lower price. And that's what America's farmers and ranchers have now found. And it's devastated the countryside as a result.
But when we go to the grocery store, we go right down any major city street and we see several grocery stores, we actually think we're looking at different stores with different options. And that’s really not true.
You know, when you go to the supermarket, there are thousands of products and you think they're independent companies, but they're made by a handful of companies. The Biden administration right now is trying to block the merger of Kroger's and Albertsons.
These are the two biggest supermarket chains, but you wouldn't necessarily realize it because they operate under dozens of different names. So I'm just going to give you some of Kroger's, for example, supermarkets. Ralph's, Dillon's, Smith's, King's Super's, Fry's, QFC, City Market, Owens, JC, Baker's, Harris Teeter, Pick and Save, Metro Market, Fred Meyer, and then Albertsons's, Safeway, Vaughan's, Shaw's, Tom Thumb, United Supermarkets, Pavilions, Cars, King Foods, on and on and on.
So you think you have a choice of dozens of different supermarkets, but it's only two. And if this merger is allowed to go through, it'll only be one.”
—The illusion of choice and the oligopolization of the food industry
