WASHINGTON, D.C. (January 8, 2001) - The National Farmers Union (NFU) today released a study commissioned by the family farmer and rancher organization detailing the implications of increasing concentration in the retail food and dairy industries. NFU President Leland Swenson was joined by report authors Mary Hendrickson, Ph.D., and William Heffernan, Ph.D., to present the report, Consolidation in Food Retailing and Dairy: Implications for Farmers and Consumers in a Global Food System, depicting the rapid increase of consolidations in the two industries and the detrimental results for consumers, farmers and the markets that serve them.
"The findings of this report show how competition and choice are being lost every day on our farms and at our dinner tables," said Swenson. "The consolidated control of large conglomerats in the food system is diluting the power of both consumers and farmers. With the acceleration toward seed-to-plate, market-wide control seen in today's market, it is time for Congress to look at how consolidation is affecting family farmers and consumers."
Wes Sims, president of Texas Farmers Union, stated, "The findings of the report show that vertical, horizontal and global integration in the food retail sector has rapidly increased in the past three years. Today the top five food retail chains account for 42 percent of the retail sales. Three years ago they accounted for only 24 percent. As a result, food retailers are becoming disproportionately dominant in the food chain.
"In addition to the oligopoly-like power this market concentration represents, the retail chains are exerting their control over the food system through agreements with large food processors by charging slotting allowances, display fees, presentation fees and other payments from manufacturers that make up more than half of the total net profit for the large retailers," stated Sims.
Sims also stated, "The report shows that vertical integration in recent years in the dairy industry is resulting in extremely low farm prices and loss of equity for dairy farmers. The low farm prices have not been passed on to consumers and in some instances, retail consolidation has allowed retailers to charge artificially high prices."
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