Le Corporation that dominate the global market for commodities groceries and large supermarket chains in the UK are protagonists of greedflation, that is, the increase in prices with the excuse of inflation to increase profits. The phenomenon is denounced by a group of researchers from UNITE, the largest British trade union in the private sector.
shrinkflation e greedflation
Shrinkflation – ie hidden price increases, achieved by reducing the quantity of product at the same price – is one of the strategies adopted by the agri-food industry to increase profits in the event of generalized price increases, as we have seen. (1)
La greedflation it is a less visible strategy in the eyes of consumers, since it is inserted in a context of generalized price increases which is exploited by some Corporation to increase profits regardless of increases in production costs.
UNITE's analysis
Researchers of UNITE analyzed the performance of the top 350 companies listed on the London Stock Exchange. And they found that the average profit margin increased by 89% in the first half of 2022 compared to the first half of 2019. (2)
Among the beneficiaries the big profits include the British giants of food distribution Tesco, Sainsbury's and Asda (controlled by Wal-Mart). They alone totaled £3,2bn in profits (€3,65bn), nearly double pre-pandemic levels.
For Tesco and Sainsbury's, which together hold 43% of the food market, the trend is unchanged. For this financial year, Tesco expects to make profits of up to £2,5 billion and Sainsbury's nearly £700 million.
Same trends for global giants like Nestlé.
Il business cereals
The blaze on cereal prices falls within this logic. The slowdown in supplies caused by the Russian-Ukrainian conflict has provided an opportunity to fatten the coffers of the large global traders of these commodities. (3)
Le Corporation which handle 60-70% of the global grain market – 'ABCD', i.e. Archer-Daniels Midland, Bunge, Cargill and Dreyfus – made $2021bn in profits in 10,4, up 225%.
Thus it is confirmed, numbers in hand, what has already been deduced in the iPES Food report (2022) on their aptitude to speculate on the food security. (4)
Profits vs growth
UNITE had already reported the phenomenon greedflation, highlighting the growth of corporate profits as inflation soared and economic growth slowed to a halt in the western world.
'The Profit Crisis it's not just a few bad apples, it's systemic throughout our failing economy. Whole industries are choosing to take advantage of a crisis, resulting in soaring prices of the goods we all need.", comments Sharon Graham, UNITE Secretary General.
UNITE
'UNITE is a union that stands up for equality and advances members' interests on a political and national level. It is also active on a global scale, building ever stronger links with trade unions around the world to confront the challenges of our globalized economy.'
#Égalité
Marta Strinati and Dario Dongo
Footnotes
(1) Marta Strinati. Consumers against shrinkflation and other hidden price increases. GIFT (Great Italian Food Trade). 22.9.22
(2) Philip Inman. 'Global greedflation": big firms 'driving shopping bills to record highs'. The Guardian. 12.3.23 https://www.theguardian.com/business/2023/mar/12/global-greedflation-big-firms-drive-shopping-bills-to-record-highs
(3) Dario Dongo. Food securitydisaster in progress. Regardless of Ukrainian wheat. GIFT (Great Italian Food Trade). 3.8.22
(4) Marta Strinati. Rising prices and food crisis in times of war. Background in the iPES FOOD report. GIFT (Great Italian Food Trade). 10.5.22
A professional journalist since January 1995, she has worked for newspapers (Il Messaggero, Paese Sera, La Stampa) and periodicals (NumeroUno, Il Salvagente). She is the author of journalistic studies on food and has published the book "Reading labels to know what we eat".
Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.
