With the help of everyone’s favorite Billionaire Robin Hood, two giant “food product” conglomerates are merging into the 5th largest food company on the planet. Don’t bother to watch the video on that link, there’s nothing there that’s not in the article and it’s basically a fawning jerkoff to Buffett and a puff piece on how great this is for the shareholders in the two companies. Here’s an even more nauseating article on the merger that includes the following execrable quote:
OK, so first of all, that kind of corpo-speak should be punishable by public flogging. Second, what this guy is yammering on about is exactly my primary concern with this merger. As Taleb points out, there’s a reason humans evolved to have two of many organs… it’s because too much efficiency causes fragility.
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| Funny that there’s no actual food in this picture |
Just look at the news coverage. Lots of talk about shareholders and value, less talk about jobs and employment (the biz journal piece does mention that “he and other executives from Heinz and Kraft said it was too early to comment when peppered with questions about potential employee cuts, divestitures and plant closings” which would have me polishing my resume, if I worked for either company) — and zero talk about how this merger, and the resulting monopoly, might impact food prices, safety, or stability.
First on food prices: The products that these companies sell aren’t food so much as industrialized food products. The price is impacted not only the the cost of the commodities that go into their manufacture (a topic I’ll be revisiting at some point), but also the food-additive and flavors industry, marketing, branding, and media tie-ins. That means, as a consumer (and since we’re talking about food here, the term is particularly apt) the price holds zero connection to any understandable driver. Not to mention that the larger the company, the more it can pressure suppliers on price and the less is has to worry about competition.
Yet this merger doesn’t seem to have raised any antitrust concerns. I would be surprised if we didn’t see price increases on these products as a result of the merger. On the bright side, most of their products are crap non-food that we shouldn’t be eating anyway. But that won’t help the family on the edge of poverty who is forced to rely on pre-packaged corn/soy food-like substances in order to survive.
Second, the issue of food safety: There is a firestorm debate going on re. the topic of whether industrial food is safer than local food or not. I think that in terms of factory farming of meat and eggs, there is no question. There’s a reason, after all, that most industrial meat animals have to be pumped full of antibiotics — it’s to keep them from dying of infection long enough to bulk up for slaughter. But even in the case of your large versus small lettuce grower, the large grower should be held to a higher standard, because the capacity for harm is so much greater. Yes, you can get salmonella from a head of farmers market lettuce… you and five other people may get sick. But when Dole has a lettuce recall, it affects 15 different states. Besides, the individual farmer isn’t profit driven the way say a peanut processing plant is — being pushed to cut costs to improve profits and make the companies they do business with happy at the risk of making people ill.
Some argue that it’s harder to trace food-born illness from local sources, but that’s a strawman. Because Heintz and Kraft (Keintz? Hraft?) don’t really sell lettuce… they mostly sell products, highly processed and with dozens of ingredients. During a recall, ConAgra had no idea what ingredient in their pot pies was making people sick. Just read this entire article for a good primer on food safety (but not while eating). It’s perfectly logical that the more the food’s been processed and handled, the more opportunities there are for food safety issues.
Finally stability: This is the big one. Even without the other issues this would be a major concern for me because it impacts the sustainability of our entire food supply. Why? Because corporate efficiency requires input and output uniformity. You don’t want your OrIda processed potato bits to taste different than last time. And Keintz certainly doesn’t want that — it’s against the tenants of quality control. That means that each potato that enters the plant has to be the same — same type, size, texture. There’s not a lot of room for variation. So what? First of all this encourages monoculture, which not only makes our food crops more susceptible to disease and disaster but also encourages overuse of chemicals and depletes our soil.
Second, it reduces the nutritional value of food. One of the things that really, really angers me is the occasional propaganda wave of news stories about “research” that proves that organic food is not healthier than non-organic. I hate these stories. First, because food in general is less nutritious than it was 50 years ago. Why? Soil depletion, which is the result of intensive modern agriculture methods. So organic food grown in depleted soil isn’t going to magically be more nutritious. While small farmers can take the time to replenish their soil, organic agri-business often don’t. Just because they don’t use chemical pesticides and can afford certification doesn’t mean they are about the quality of their land. Second — and off topic for this point — IT’S NOT ALL ABOUT US (but that’s a rant for another day).
There’s a second reason that monoculture reduces the nutritional value of food — its because food is bred to:
- Have sweet, simple flavor profiles
- Be complete uniformity in color, size, and shape
- Be able to be transported long distances and stored for really long times
If any nutrition survives that breeding process, it’s more accident than design. Sure, most of the nutrition left in Hraft’s ingredients is going to get processed out anyway, but it leaves the typical consumer with fewer and fewer choices when it comes to vegetables, which means a less varied diet.
The most amusing thing for me is that the news coverage of this merger mentions that both brands are a bit stodgy and not in tune with consumer’s demands for more fresh and healthy options. So the fix is to merge into an even more giant, centralized behemoth? Let me make it clear that none of this is good news.
