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Running Head: Monopolies in the Food Industry

Author Note
Assignment is for English 1311 class taught by Professor Lawrence








Monopolies in the Food Industry
Erik Ramirez
University of Texas at El Paso




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Monopolies in the Food Industry
Abstract
Our food industry today is filled with large businesses that own a huge part of the
industry. Monopolies are very harmful to our society in many ways. They affect us economically
and socially. From the way these monopolies treat their animals, workers, and even their
customers it is wrong. Many people still remain uninformed of all these issues, as it is well
covered up. Food monopolies need to be exposed and be stopped.
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Monopolies in the Food Industry
Monopolies in the Food Industry
Every day companies grow and grow, some more than others. Our nation has always
been based off one thing: competition. People compete, companies compete, and everybody
competes. Most strive for one thing, money. In our food industry today, four companies own a
large majority of the business. This takes away the founding principle of competition and forms
what is called a monopoly. Although dissolving monopolies will not allow these four companies
to make as much money, monopolies should not exist because they negatively affect everyone
else, including the workers, the customers, and the economy.
According to food&waterwatch.org (2012), in a study done by University of Missouri-
Columbia in 2012 it found that the four largest companies [in the food and agriculture business]
controlled 82 percent of the beef packing industry, 85 percent of soybean processing, 63 percent
of pork packing, and 53 percent of broiler chicken processing. To many people, these four
companies are considered monopolies.
In Curtis Thomas (2013 p. 397) article, The Power to Grant Monopolies in the Federalist
Marketplace of State Experimentation, he describes a monopoly as a business organization
with the power to control prices or exclude competition. The food industry could very well be
considered a monopoly. In every aspect of the food industry there are a couple of businesses that
own the majority of the business, such as Monsato in the seed business, Pepsi in snacks and
beverages, and Tyson in the chicken and meat industry. Thomas also goes on to say that a
business does not necessarily need to own all of the industry but just the majority to have an
impact on how it operates. These businesses really do have an extreme impact on the food
industry. As people shop down the grocery store, they think they have such a variety with all the
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Monopolies in the Food Industry
different brands. But little do they all know that almost all our variety leads to the same couple
of companies.
At first people did not believe that this was true until they came across some astonishing
results. In an article for Forbes by Kate Robertson (2010) called America's Biggest
Food Companies, Robertson lists some basic companies that we all know and what they own.
For example, PepsiCo not only owns the majority all of soft drinks but much more. PepsiCo is
the owner of brands like Ruffles, Lays, Tostitos, Fritos, Tropicana, and Quaker oatmeal. Usually
when customers go to the store, they try to decide whether to buy Lays or Ruffles. Either way,
PepsiCo makes a profit. There are many more billion dollar businesses in all aspects of the food
industry just like PepsiCo, suffocating smaller businesses and destroying the economy.
Monopolies are only not found at the grocery store but even in the stages before food
reaches the grocery store. In gmeducation.orgs (2013) article The Monsanto Monopoly, it
says that in a study done by Philip Howard, a Michigan State University researcher, four firms
control own a major part of the global seed industry. Monsanto, DuPont/Pioneer Hi-Bred,
Syngenta, and Dow AgroSciencesown 80% of the US corn market and 70% of the soybean
business. Philip Howard says it can no longer be regarded as a competitive market. People
generally agree with Howards statement because there is really no competition among the
businesses. The big businesses are getting richer and bigger, while the smaller ones are losing
money and going out of business, which in return negatively affects the economy.
The monopolies in the seed industry have led to many problems, especially for farmers.
Because of these giant seed monopolies, older conventional seed varieties have been pushed out
and replaced with genetically modified seeds. This causes every crop to look the same which
negatively affects farmers. Since there is no diversity in the crops, it makes the risk of
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Monopolies in the Food Industry
catastrophic destruction of food crops by disease or climate a very real threat, according to
gmeducation.org (2013). The prices for these GM seeds are also much more expensive which
only adds to the debt farmers already live in.
Many argue these large food businesses are causing many economic problems. More and
more today, the size of farms are increasing but the number of farms are decreasing. First of all,
this leads to more unemployment. Secondly, researchers find that these companies over all care
less about individuals. A monopoly will spend less money researching and developing to suit the
consumer but the company will do whatever it can to cut costs and make more money. In the
motion picture Food Inc. many shocking discovering are made of these huge businesses. From
the farms to the factory workers to even the customers, everyone is mistreated by monopolies.
Food Inc. exposes all of the abuse beginning with the animals. Animals are abused not because it
is what the farmers want, but because it is what they are told to do. However, not many people
are aware of this abuse. If anything it should be a bigger issue than it is. If people are being sent
to prison for abusing animals these companies should also be guilty. In the film, many farmers
do not even allow them to film on their property because the company they work for does not
allow it. If there is nothing to hide, why not allow the farms to be filmed? This would not happen
if there were no monopolies. Many people know about the mistreatment but continue supporting
these companies because they are the only ones in the grocery store. If there were no monopolies
and there were more options at the grocery store, more companies would be exposed by their
competing companies. It would actually be a focus for companies to sell the product that people
want to buy, not the cheapest product possible.
Food Inc also exposes how these monopolies treat workers. Farmers live their whole life
in debt and make very little money. They have no say in their contracts because they can easily
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Monopolies in the Food Industry
be replaced. Many of the factory workers are mistreated and often earn below minimum wage
and work long hours. These workers are usually illegal immigrants; it is also illegal to hire illegal
immigrants for work. The sad part is the government knows that this is happening and does
nothing.
Lastly, these businesses false advertise to their customers and claim the food is farm
fresh when in reality it is from genetically modified animals where some animals have never
even seen daylight. On the packaging of meats the companies will put a green pasture with
whatever animal it is selling, but these animals were basically held captive in factories where
they would be slaughtered when ready. This just shows how customers are lied continuously by
monopolies.
The United States of America has been against large businesses since its establishment.
Several acts have been placed to stop huge corporations from forming, such as the Sherman Act
of 1890, the Clayton Act of 1914 and the Federal Trade Commission Act of 1914. All were
placed not only to stop monopolies from forming but also to keep competition from dying out.
However, in a recent court case, according to the New York Times article Supreme Court
Supports Monsanto in Seed-Replication Case by Adam Liptak (2013), the government did
decide to side with big business. Bowman v Monsanto was a case between a small farmer
(Bowman) against a large seed manufacturer (Monsanto). Monsanto sued Bowman for patent
infringement. Monsanto argued that seeds purchased from them cannot be reproduced and must
be bought again every year. The Supreme Court took the side of Monsanto. This angered many
people because it only let an already huge company grow more and more every year. Others
thought the right decision was made because of the patent it received and that Monsanto is doing
nothing wrong.
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Monopolies in the Food Industry
Why stop monopolies from forming, one might ask. In Richard Posners (1975) article,
The Social Costs of Monopoly and Regulation, he has a different view of monopolies. He
argues that the government really should not intervene with the large corporations for many
reasons. Primarily, he argues that antitrust laws are simply just price discrimination and
theoretically the total social costs for discriminating a monopoly are greater than those of a
single priced monopoly. Other people who are not against food monopolies say that food from
these large businesses are often cheaper than local farms, and if these genetically modified foods
were harmful they would be banned and not be able to be served to the public. Lastly, if there
were no large businesses and all food products were from small farms, prices would not only rise
but if that item was not in season they would be impossible to find. These large businesses
always have food available even when it is not in season because they are able to afford to
grow crops in different parts of the world, and that is to everyones benefit.
Food monopolies have a positive side and a negative side. However, there is more
negative than positive. These large monopolies should be illegal in our country not only due to
the lack of competition, but also what they do; how they operate should be even more illegal in
its own right. These companies take advantage of everyone involved and focus on making a
profit and nothing else. If more of these companies operations were exposed to the public, this
issue would be more of a priority than it is now. Unfortunately, the government has seemed to
always turn a blind eye to these large food companies and fail to investigate them the way they
should. Food monopolies are harmful in every aspect and should not be legal or even exist.



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Monopolies in the Food Industry


References
Jablano, V.J. (2013). The Chaotic Production Growth Model of the Monopoly Firm and
Incentives to Innovate. Hyperion International Journal of Econophysics & New
Economy, 6(1), 55-66. Retrieved from
http://web.a.ebscohost.com/ehost/detail?sid=9c87f6f6-65c0-
4818b0ccc3591bd9249c%40sessionmgr4001&vid=1&hid=4101&bdata=JnNpdGU9ZWh
vc3QtbGl2ZSZzY29wZT1zaXRl#db=a9h&AN=91526590
Liptak, L.A. (2013). Supreme Court Supports Monsanto in Seed-Replication Case. New York
Times. Retrieved from http://www.nytimes.com/2013/05/14/business/monsanto-
victorious-in-genetic-seed-case.html?_r=0
Posner, P.A. (1975). The Social Costs of Monopoly and Regulation. Journal of Political
Economy, 83(4), 807-828. Retrieved from
http://0www.jstor.org.lib.utep.edu/stable/1830401
Robertson, K.A. (2010). America's Biggest Food Companies. Forbes, Retrieved from
http://www.forbes.com/sites/investopedia/2010/11/02/americas-biggest-food-companies
The Economic Cost of Food Monopolies. (2012) Food & Water Watch. Retrieved from
https://www.foodandwaterwatch.org/reports/the-economic-cost-of-food-
monopolies/
The Monsato Family. (2013) gmeducation.org. Retrieved from
http://www.gmeducation.org/latest-news/p207220-the%20monsanto%20monopoly.html
Thomas, C.T. (2013). Monopolies in the Federalist Marketplace of State Experimentation.
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Monopolies in the Food Industry
Brigham Young University Law Review, 397-420. Retrieved from http://0-
www.lexisnexis.com.lib.utep.edu/hottopics/lnacademic//
Weyermann, D. (Executive Producer) & Kenner, R. (Director). (2009). Food, Inc. [Motion
picture]. United States: Magnolia Pictures.