In a Food Ingredients 1st January 24 article “Food price inflation hits historic highs as monopolies face exploitation accusations,” AAI President Diana Moss praises the Biden administration’s recent pledge of $1 billion to promote competition among small meat producers.
From the article:
Biden’s rescue plan
The US administration recently pledged US$1 billion to promote competition among small meat producers. This includes US$375 million in grants for new plants and US$100 million to give guaranteed loans for meat supply chain infrastructure such as cold storage. The administration also allocated US$100 million for meatpacking worker training and safety.
Antitrust experts say tougher legislation is needed to prevent rising inflation.“This is long overdue attention to competition concerns in the food sector,” says Dr. Moss. “Decades of massive consolidation in processing, manufacturing, and retail grocery has produced markets with dominant players – or only a few players – who have strong incentives to coordinate rather than compete.”
“This has resulted from lax antitrust enforcement in food and agriculture in the US, leading to significant market power upstream and downstream where few players bulk up through merger to gain bargaining power over suppliers and customers. Over time, the food supply chains have weakened, with competition ‘bottlenecks’ that produce unstable, un-resilient supply chains that harm smaller producers and consumers,” she continues.
“It is very much a public policy problem,” Moss asserts, and therefore requires strong antitrust enforcement in public and private markets, and regulatory initiatives to improve market access, price transparency, and other competitive factors.