Hard to Swallow

The global trade in foodstuffs is obviously critically important for developed nations to eat and for developing nations to generate import revenues. The mega-huge, multinational companies that control the supply chain and trading movement set quality standards, have powerful influence on pricing (based on their manipulation of supply and demand) and literally control the fate not only of major agribusiness corporate farms but of those marginal farmers at the edge of surviving able to export a portion of their output for cash. The power of these “companies without borders” is staggering

According to the Fairtrade Foundation, three companies now control over 40 per cent of the world’s coffee sales, eight companies have cornered the supply of cocoa and chocolate, seven account for 85 per cent of tea production, five have rounded-up 75 per cent of the world banana trade, and the largest six sugar traders control approximately two-thirds of that commodity. While local farming and local consumption is by far the largest segment of global food production and consumption – much of this at the subsistence level – once the crops make their way into the international food chain, these multinationals pretty much control this entire sector. Some of these biggies you might know, like Nestle, Coca-Cola and PepsiCo, while other mega-huge players are not part of our daily lexicon, like ConAgra or Cargill.

For those who envision a happy farmer selling organic produce directly to regional wholesalers and retailers, think again. These big entities are all over the “organic” space as well. “Bear Naked, Wholesome & Hearty, Kashi: all three and more actually belong to the cereals giant Kellogg. Naked Juice? That would be PepsiCo, of Pepsi and Fritos fame. And behind the pastoral-sounding Walnut Acres, Healthy Valley and Spectrum Organics is none other than Hain Celestial, once affiliated with Heinz, the grand old name in ketchup…

“Why this has happened is obvious. As anyone with even a passing familiarity with the concept of the ‘grocery store’ is aware, products labeled as ‘organic’ carry a premium. Organic fruits and vegetables are always more expensive than their non-organic counterparts; organic packaged foods even more so. For a major corporation that’s already in the business of selling food, that mark-up is hard to resist. As is the fact that the organic market is one of the fastest growing in food sales, one of the few spots in a mature marketplace where that’s the case.” Grist.org.

For the little desperate farmers all over the world, their only access to the global marketplace is through these conglomerates, perhaps through local cooperatives but more likely through local corrupt officials who hive off desperately needed cash to line their own pockets before moving these commodities into the food chain. According to Oxfam International (a seventeen nation non-profit, headquartered in Oxford, England, targeting poverty and injustice), up to 80% of the global population considered ‘chronically hungry’ are farmers. The conglomerates could tackle that local corruption and improve the lot of the impoverished, but most of their efforts are token gestures aimed at generating a better public image… but at the subsistence level, nothing has changed.

Like most corporations, these companies are focused on profitability, not the well-being of their consumers. “In an international analysis of involvement by so-called ‘unhealthy commodity’ companies in health policy-making, researchers from Australia, Britain, Brazil and elsewhere said … that through the aggressive marketing of ultra-processed food and drink, multinational companies were now major drivers of the world’s growing epidemic of chronic diseases such as heart disease, cancer and diabetes.” Ritholz.com, February 27^th. Obesity in many Western nations, particularly the United States, has become epidemic as a result. Animals kept in despicable conditions are routine parts of this food chain as well, but how these critters are raised is of little concern to the conglomerates that really don’t care, even if such harsh conditions also require that these animals be feed antibiotics and other chemicals to enhance their commercial viability.

With so much at stake, these companies have armies of lobbyists and expediters to minimize the impact of governments trying to rein in their excess, control those chemical additives and require truth in labeling. “Writing in [the prestigious UK] The Lancet medical journal, the researchers cited industry documents they said revealed how companies seek to shape health legislation and avoid regulation… This is done by ‘building financial and institutional relations’ with health professionals, non-governmental organizations and health agencies, distorting research findings, and lobbying politicians to oppose health reforms, they said. [… Lancet researchers] cited analysis of published research which found systematic bias from industry funding: articles sponsored exclusively by food and drinks companies were between four and eight times more likely to have conclusions that favored the companies than those not sponsored by them.” Ritholz.com

The battles over labeling and controlling the sale of unhealthy sugar and fat-laden junk food, particularly to our children, can get downright vicious. Genetically engineered food scares some people, but establishing exactly how much of something needs to be an ingredient in a blend to get the right label is often some heavily negotiated fraction less than 100%. In truth, we often do not know what we really are eating or where it came from. And then there is the occasional scandal, like the horsemeat-as-beef debacle that gripped Europe recently, that illustrates how greed can massively influence the market in less-than-legal ways. Hey, America, don’t feel bad, government budget cuts will not remove too many USDA food inspectors to check what we eat. To my friends, Gary and Sarah Legon, Americans retired to France and watching the horsemeat fly by, thank you for inspiring this piece.

I’m Peter Dekom, and if I am what I eat, I suspect I have some very real reasons to be concerned.