Why Buy Local? Part 2: Big Corporate “Monopolies”

This article is part two of a series about why we should support local businesses. In case you missed part one: Why Buy Local? Part 1: The Illusion of Choice.

In Part 1, we discussed that only several big corporations own dozens of “brands”, giving us this illusion of choice. This is happening in nearly everything we buy, including consumer goods, technology, travel, media/entertainment, healthcare, pharmaceuticals…. You name it.  But since we drilled down on the food and beverage industry, let’s pick up with carbonated soft drinks. 

According to an investigation published by The Guardian, 92.9% of carbonated soft drinks are owned by three corporations: Coca-Cola, PepsiCo, and Keurig Dr. Pepper.   Yes, you read correctly…. Over 90%.  Only three companies? 

92.9% of carbonated soft drinks are owned by three corporations.

And these are mega companies. According to Statista, Cola-Cola’s revenue reached about 43 billion U.S. dollars worldwide in 2022. Almost one third of that was generated in North America. In 2022, PepsiCo's net revenue worldwide amounted to about 86 billion U.S. dollars; about 30% generated in North America.

Why is this a Problem?

The near-total control of any market by just three major corporations can have significant negative impacts on our local economy and community.

First, it obviously leads to a decrease in competition, resulting in higher prices for consumers. These mega companies have less incentive to keep prices low when there are fewer competitors. They’ve also been known to control and set prices to significantly increase their gross profit and shareholder dividends.

Opportunities for small businesses and entrepreneurs to enter the market and compete with mega companies are very limited to nonexistent. Less competition can also stifle innovation and limit the growth of local businesses, which contribute to the local economy.

Second, it can lead to a concentration of wealth and power in the hands of these few corporations. For example, mega corporations can have greater influence over government policy, which can lead to prioritizing the interests of the corporations over those of the community. In 2023 alone, Agribusiness industries spent $177,251,252 in lobbying our politicians.

Third and possibly the most important, what if one of those mega corporations shuts down?  A local plant shutdown or workforce reduction will certainly have a significant impact on the local economy and community. But, what about the interruption nationwide to that food source? 

Well, okay, I get it.  I wouldn’t miss soft drinks either, but the same mega corporation scenario plays out in most of our food sources! Take meat for example.  Most of us consume meat, right? Four large conglomerates dominate and control between 55-85% of the U.S. market for pork, beef, and poultry.

The "Big Four"—Tyson, JBS, Cargill, and National Beef—purchase and process 85 percent of beef in the United States.

According to The Guardian:

“After a spate of mega-mergers, more than 80% of beef processing and 70% of pork processing is controlled by four multinational giants.”

This doesn’t just apply to our meat sources. The joint investigation by The Guardian and Food and Water Watch found that a handful of powerful companies control the majority market share of almost 80% of dozens of grocery items bought regularly by Americans.

• The top companies control an average of 64% of sales for 61 popular grocery items investigated.

• For 85% of the groceries analyzed, four firms or fewer controlled more than 40% of market share.

• Four firms or fewer controlled at least 50% of the market for 79% of the groceries.

• For almost a third of shopping items, the top firms controlled at least 75% of the market share

These mega-companies, making billions of dollars, have significant influence over what American farmers grow, how much they are paid, what we eat, and how much our groceries cost. According to The Guardian investigation, “only 15 cents of every dollar we spend in the supermarket goes to farmers. The rest goes to processing and marketing our food.” The consolidation of these companies is raising concerns about consumer choice, farmers’ rights, and food prices.

Where We Spend Our Money Matters!

Yes, it may be more expensive and less convenient, but we can do something about this!

• Shop at local farm markets and grocers.

• Support your local farmer - buy your meat locally.

• And do your body a favor - skip the carbonated beverages entirely!

Consider this: What kind of legacy do we want to leave our children and grandchildren? A world run by corporate monopolies, or a thriving, self-reliant local community in which to live?

In Part 3, we’ll dive even deeper. Who owns these mega corporations, and why we should care.