Groups Ask USDA and DOJ to Stop the Retail Squeeze on Farmers and Consumers

Today consumer and farmer groups encouraged the U.S. Department of
Agriculture (USDA) and Department of Justice (DOJ) to follow up its
final competition workshop tomorrow with concrete actions to address the
anti-competitive practices that benefit a few large players in the food
system.

At a press conference at the National Press Club, national consumer
group Food & Water Watch joined farmers and ranchers to discuss how
consolidation in the retail sector has affected the marketplace.
Consolidation has given the largest retailers considerable purchasing
power that allows them to exert influence over food manufacturers, meat
processors, produce shippers and other suppliers to reduce their prices
and require specific packaging and manufacturing practices. Suppliers
also pressure farmers to lower their prices and workers to lower their
wages--and when a few control the entire market, consumers can lose as
well.

"The American food chain is shaped like an hour-glass where a handful
of large powerful companies stand between more than 300 million
consumers and two million farmers. Thanks to mergers and consolidation,
vibrant competition in the retail grocery industry is all but dead,"
said Wenonah Hauter, Executive Director of Food & Water Watch.
"There is an illusion of choice between many different but similar
processed foods, but almost all of them are sold by the same few
companies."

Real expenditures on food have risen 12 percent over the past decade.
Food inflation was especially high during 2007 and 2008. These growing
prices are especially difficult for lower-income consumers. According to
a 2008 report by the Congressional Research Service, even a 4 or 5
percent increase in the price of food has a significant impact on the
purchasing power of lower income families.

A majority of studies reviewed by the USDA found that increased
grocery chain consolidation contributed to an increase in consumer
grocery prices that may force families to choose processed food, which
can be sold more cheaply, over more healthful options. Today, with 40
percent of households earning less than $39,000, a small increase in the
price of food can dramatically erode family food security. The USDA
recently reported that one out of 7 households is suffering from hunger
and one out of 4 children do not have enough to eat.

"Children are the ones left out on the margins," said Hauter. "As
food has become more consolidated, processed foods have become more
prevalent and kids have become more obese. It's no coincidence that 75
percent of snack chips and 80 percent of kid's cereals are sold by the
top four firms, and the four biggest cookie manufacturers sell
two-thirds of all cookies."

Hauter was joined at the press conference by Alabama contract poultry
grower Garry Staples; Minnesota hog producer Paul Sobocinski, also of
the Land Stewardship Project; Wisconsin dairy farmer Joel Greeno,
National Family Farm Coalition; and Peter Mickelsen, Montana ranch owner
and former cow-calf operator, Northern Plains Resource Council.

As the USDA and DOJ wrap up a year of traveling across the country to
hear the concerns of agriculture producers about the lack of fair
competition, these groups call for actions to restore fairness in the
marketplace, including:

• Merger Review: DOJ should review the large
  agricultural mergers over the past decade to determine the impact these
  corporate combinations have had on the marketplace.
• The Federal Trade Commission must join the
  interagency task force on agricultural concentration and take action to
  curb the effects of concentrated market power in the retail and
  processed food sectors.
• Finalize the recent livestock rule: The USDA should
  finalize and implement strong livestock marketing and contracting
  rules, such as the proposed GIPSA rule that was required by the 2008
  Farm Bill.