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Food Fighting
 

Photo: SXC

MIND MAGAZINE |In the last years, you probably heard about supermarket mergers, this is only one example of the many changes happening in the food industry. Independent convenience stores are also slowly disappearing, making place to regional corporate-owned stores. Couche-Tard, for example, is a Canadian convenient store chains in the middle of an expansion phase that allowed the company to own over 2,000 locations and to double its revenues in 2002. The current transformations in the food industry are lead by a few powerful companies looking to control of what ultimately lands on your plate.

The global market for food retailing will shortly be saturated, with Occidental populations growing very slowly and Third-World countries not possessing the economic structure necessary to be profitable for supermarket chains. Therefore, the only way to get more customers is to steal from competitors. And what do consumer want? Low prices, of course, and that’s bad news for food producers. The extensive usage of pesticides, genetically modified crops and the general impoverishment of farmer is the new reality of the globalization age.

From the farmers producing the fruits, vegetables and meat to the companies transforming it into final products the pressure is on to save on the cost. The food transformation industry must prepare brand food according to its client needs. Supermarket chains have been running since decades on low profit margins and high stocks turnover. That means that in order to reduce the final price of a product, the price at witch it’s bought must be reduced too, reducing profits for producers. And the quality must be maintained too, clearly meaning less profits (because of the costs of high quality food). Supermarkets chains can get their products made anywhere, given the strength they have over the food processing market.
 

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As a consequence of this pressure, if nothing gets changed, half the food transformation industry will disappear in less than five years in Québec alone, according to Jacques Légaré, president of the Quebec Food Processor association. Moreover, shelf space is reduced for other brands, giving less choice to consumers as to the brand they want to buy and putting even more pressure on producers, because they have to fight for shelf space. In some case, in France for example, food processors are also asked for a tax ranging from 1-2% of their sales to the buyer!

But the pressure is not only on food processors, it’s also on raw producers: the fruits and vegetables you have in your fridge come from somewhere, don’t they? Over the years, grocers have joined in their efforts to centralize purchasing efforts and obtain better bargains from suppliers. Cooperatives and producers have been forced to join and mergers started, bigger producers buying smaller ones at a pacing rate. And producers were and are still forced into constantly reducing their prices. This leads to improvements in productivity but also soil extenuation, forcing to use more pesticides, herbicides and so forth; causing more pollution is one of the effects of this pressure. We are entering a vicious circle right now. The food industry, that was once qualified as a perfect competition, is now an oligopoly in every developed country in the world.

Third World countries have been under pressure too. As the prices of finished goods have gone up in the last decades, the prices of raw materials have been steady, including coffee and tropical fruits, despite inflation. But the price of life is still going up in Third World Countries, and most of these countries rely on raw materials for their economy. For supermarkets chains throughout the world, Colombia equals coffee, not luxurious vegetation, fertile soils and natural heritage, as it should be.

Supermarkets are actually making better profit margins than they used to, in part because of their pressure on producers. But once food will be more costly for them to buy, don’t worry, they’ll pass on the bill on consumers. You might even get yourself to pay more that you used to pay before, because there are fewer players in the market. Three players dominate the game in Canada, that means oligopoly, and who says oligopoly says possible collusion. Already, in France, hypermarket chains have been adopting similar strategy as to their approach toward suppliers (the infamous tax I mentioned).

The ultimate impact is on consumers. You probably heard about this GMO (genetically modified organisms)? It’s all over the newspapers. It’s all over your fridge too, and you don’t know about it. For example, your canola oil contains at least 85% GMOs, certified by Monsato itself! This is a danger for anyone. Why bother researching to see if GMOs can have negative impacts on human health? “It costs less!” would a grocer respond. This can go as far, and without your consent. The finish they put on these gorgeous-looking apples in supermarkets? Wow, do these apples look incredible! Well, surprise! This finish could cause cancer! Every means necessary to achieve higher consumption and bigger profits are good.

Supermarkets have been putting more and more pressure on their suppliers, both of processed and raw foods. The concentration of purchasing power by supermarket chains even had consequences on the quality of water in agricultural zones, by overusing pesticides and other chemicals. The use of GMOs by private companies for economical reasons has never been authorized by those who consume the product, that is, those who eat it: you! And remember that at the moment you enter the supermarket, you have something very important to do: a choice. Next time, take a look at the labels and choose your brand well.


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