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Food Fighting
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.
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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