U.S. Probes Big Beef’s Link To Inflation

Unprecedented consolidation in the U.S. food industry may be a cause of rising prices and empty grocery store shelves.

The White House, supported by independent economic analysts, has asserted there’s a link between inflation and the dwindling number of food suppliers. The House of Representatives antitrust subcommittee, chaired by Democrat David Cicilline of Rhode Island, is expected to take on the topic in a hearing scheduled for Wednesday.

Mergers and acquisitions have swept the food industry in recent years, making fewer and fewer players responsible for feeding a growing country and sparking concern over the fairness of price hikes. The biggest consolidation has been in beef, where four companies now control 85% of the U.S. market. Four pork and chicken companies supply 70% and 54% of their respective markets, while the number of supermarket chains has fallen by nearly one third in the past three decades, with four companies responsible for more than two thirds of sales.

At the same time, consumers are facing the worst inflation since 1982. Food prices grew 8% in the past four weeks, according to a NielsenIQ scan of supermarkets nationwide. NielsenIQ predicts food-price increases will persist in the first half of 2022 and level out by the end of the year. That comes on the heels of a 5% rise last year.

“We’ve never seen that before,” said Peter Conti, NielsenIQ’s senior vice president. “Usually, there’s a price increase, five years go by, then another price increase. We’re seeing price increases six months apart. That’s got my attention. The frequency of price increases is unprecedented.” President Joe Biden has pledged to take on antitrust with more fervor than previous administrations, and he recently said that the way to combat inflation is to combat antitrust. Biden appointed antitrust crusader Lina Khan to head the Federal Trade Commission, the government’s main antitrust agency, and Khan has promised to take on Big Tech firms, such as Google and Facebook. She’s said little on the subject of Big Food.

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