Alarming Concentration

(Photo by Aditya Vyas on Unsplash)

By Alicia Birrell

Every year the Thanksgiving season marks the beginning of the holiday shopping frenzy. This past year there were 33 days between Thanksgiving and Christmas. That means that retailers had 1 more day than they did in 2017 and 6 more days than they do this year to reap the benefits of the holiday season. But who is really benefiting from holiday shopping?  

According to a study done by the Open Markets Institute, segments of corporate America are becoming increasingly concentrated through monopolization. Often times, Increased concentration is not as visible because firms work under an umbrella corporation. They know that consumers purchase products based on what brand resonates with them so in order to maximize profits they utilize different brands to target sub-groups within the same industry.  Sarah Miller, deputy director of the Open markets institute called this system of branding a “scam economy” where “competition is an illusion, and choice is an illusion.”

For example, J.M. Smucker controls 46% of the market share for peanut butter and they operate under five different brand names such as Smucker’s, Jif, Adams, Laura Scudder’s, and Santa Cruz Organic. Three other firms make another 46% of the peanut butter market.

In the Dry Cat Food sector, four companies, Nestlé, J.M Smucker, Supermarket Brand and Mars, control 97% of the market. Nestlé leads the pack with 57% share of the market by owning the brands Purina, Fancy Feast, Felix and Friskies.  

This concentration of power is not exclusive to a small group of industries. In fact, it includes many diverse industries such as website domains providers, medical supplies, baby formula, airlines and cell phone companies. To illustrate the overreaching impact of increasing concentration across industries the graph below shows how market shares have grown since the early 2000’s.

Many factors have contributed to an increase in the power of monopolies within the United States. While these factors must be addressed, it is equally important to acknowledge the data and the negative impact that it is having on our economy. This shocking information should be a wake-up call for Americans to re-establish real choice within our economy. The strength of the free market comes from innovation and competition, not seniority and protectionism.  

So, I ask you, to be aware of the items you purchase. You will likely find that you don’t have as many options as you think.

Strata is committed to helping others become more informed about the issues that impact our everyday lives. For more information about America’s Concentration Crisis visit https://concentrationcrisis.openmarketsinstitute.org/

Sources:

https://concentrationcrisis.openmarketsinstitute.org/industry/dry-cat-food/

https://www.vox.com/2018/11/26/18112651/monopoly-open-markets-institute-report-concentration