You’ve likely seen these brands as you walked the aisles of an organic and natural foods supermarket: Silk. So Delicious. Horizon Organic. Wallaby Organic. Earthbound Farm.
If you saw these brands, it probably did not occur to you that these brands were already under the umbrella of one corporation: WhiteWave Foods Company, which describes itself as “a global company which generated $4 billion in sales in 2015 and has a portfolio of large and leading branded platforms in North America and Europe.”
This is the company that is making news Thursday with news that Danone – best known for Dannon yogurt but which also owns the dairy brands Activia, Stonyfield and Oikos as well as Evian, Dannon and Volvic bottled water – and WhiteWave are merging.
“This transaction will create a leading U.S. refrigerated dairy player, as well as one of the top 15 largest U.S. Food and Beverage manufacturers,” Danone said in a statement.
It also underscores a danger highlighted by Sen. Elizabeth Warren (D-Mass.) last week in a major speech condemning increasing corporate concentration and consolidation in virtually every consumer market.
“Concentration threatens our markets, threatens our economy, and threatens our democracy,” she said in the speech at New America in Washington on “America’s Monopoly Problem.”
Warren is elevating the problem of corporate consolidation just as the draft of the platform of the Democratic National Committee, which will be debated starting Friday at a party meeting in Orlando, calls for the Democratic Party to “take steps to stop corporate concentration in any industry where it’s unfairly limiting competition.” The draft platform pledges to “make competition policy and antitrust stronger and more responsive to our economy today, enhance the antitrust enforcement arms of the Department of Justice and the Federal Trade Commission, and encourage other agencies to police anti-competitive practices in their areas of jurisdiction.”
The organization Food and Water Watch issued a statement Thursday in opposition to the Danone-WhiteWave merger. “Megamergers like this and the others we’ve seen in recent years allow powerful, wealthy food companies to seize control of the entire food chain, from seed to supermarket,” the statement said. It went on to say that “these megadeals consolidate corporate power in the hands of only a few giant food companies, in turn limiting choices for consumers while raising retail prices. These bigger firms also underpay independent farmers for their products, undermining the economic viability of family farms.
“We urge the U.S. Federal Trade Commission to stand up to merger mania in the supermarket and block this deal that will harm farmers and consumers.”
Warren’s speech underscored the pervasiveness of corporate concentration. There are just four major U.S. airlines, for example, which control 80 percent of all domestic airline seats. Five major health insurance companies control more than 80 percent of the health insurance market. Three chains control 99 percent of the nation’s drugstores. Four companies control nearly 85 percent of the U.S. beef market. One company, Comcast, has more than half of the nation’s cable and broadband subscribers.
Warren warns that this is not just a market problem or a consumer problem, but is also a democracy issue. “The larger and more economically powerful these companies get, the more resources they can bring to bear on lobbying government to change the rules to benefit exactly the companies that are doing the lobbying,” she said.
Both Warren and the drafters of the Democratic Party platform agree that what’s needed is more enforcement of the laws that are already on the books. And that would mean that the agencies responsible for enforcing those laws – the Federal Trade Commission and the Justice Department – need to be led by people who will cast a tough, skeptical and publicly accountable eye on every merger that comes before it.
What’s also needed, Warren adds, is “a revival of the movement that created the antitrust laws in the first place.”
“As a people, we understood that concentrated power anywhere was a threat to liberty everywhere. It was one of the basic founding principles of our nation. And it threatens us now,” she said.