Food companies throughout the entire food chain are rapidly consolidating, leaving just a handful of powerful middlemen between 2 million American farmers and more than 300 million consumers. One of the most critical links in the food chain that has suffered the effects of this consolidation is the retail sector. A smaller number of grocery stores and supermarkets are exerting more and more control over which foods reach the mass market and the prices families pay at the checkout case. As food retail companies grow larger, so too does their influence on food processors and manufacturers, encouraging consolidation up the food chain, all the way to farmers growing crops and raising livestock.
Large grocery store chains claim to offer consumers lower prices by increasing business efficiency and offering discounts from bulk purchasing. But when these chains control the market, it can actually result in higher prices for consumers. According to the American Antitrust Institute, the concentration in buyers, processing and retailing has “undoubtedly contributed to the increased cost of food.” Consumers are especially vulnerable to the consolidated market power of food companies since food is an essential item. Even worse for inner-city and rural consumers, retail consolidation contributes to food deserts, areas where healthy food is inaccessible due to a lack of grocery stores.