Guardian Unlimited | The Guardian |
Free trade leaves world food in grip of global giants
John Vidal in Porto Alegre
Thursday January 27, 2005
The Guardian
Global food companies are aggravating poverty in developing countries
by dominating markets, buying up seed firms and forcing down prices
for staple goods including tea, coffee, milk, bananas and wheat,
according to a report to be launched today.
As 50,000 people marched through Porto Alegre, in southern Brazil, to
mark the opening of the annual World Social Forum on developing
country issues, the report from ActionAid was set to highlight how
power in the world food industry has become concentrated in a few
hands.
The report will say that 30 companies now account for a third of the
world's processed food; five companies control 75% of the
international grain trade; and six companies manage 75% of the global
pesticide market.
It finds that two companies dominate sales of half the world's
bananas, three trade 85% of the world's tea, and one, Wal-mart, now
controls 40% of Mexico's retail food sector. It also found that
Monsanto controls 91% of the global GM seed market.
Household names including NestlŽ, Monsanto, Unilever, Tesco,
Wal-mart, Bayer and Cargill are all said to have expanded hugely in
size, power and influence in the past decade directly because of the
trade liberalisation policies being advanced by the US, Britain and
other G8 countries whose leaders are meeting this week in Davos.
"A wave of mergers and business alliances has concentrated market
power in very few hands," the report says.
It accuses the companies of shutting local companies out of the
market, driving down prices, setting international and domestic trade
rules to suit themselves, imposing tough standards that poor farmers
cannot meet, and charging consumers more.
The report says the 85% of all the recent fines imposed on global
cartels were paid by agrifood companies, with three of them forced to
pay out $500m (£266m) to settle price-fixing lawsuits.
"It is a dangerous situation when so few companies control so many
lives," said John Samuel of ActionAid yesterday.
The ActionAid report argues that many food behemoths are wealthier
than the countries in which they do their business. NestlŽ, it says,
recorded profits greater than Ghana's GDP in 2002, Unilever profits
were a third larger than the national income of Mozambique and
Wal-mart profits are bigger than the economies of both countries
combined.
The companies are also said to be taking advantage of the collapse in
farm prices. Prices for coffee, cocoa, rice, palm oil and sugar have
fallen by more than 50% in the past 20 years.
The report feeds into growing calls at Porto Alegre for the
regulation of multinational food companies. A coalition of the
largest international environmental, trade and human rights groups,
including Greenpeace, Friends of the Earth, Amnesty, Via Campesina
and Focus on the Global South, yesterday said they would be working
together to press for corporate accountability.
Retailers such as Tesco, Ahold, Carrefour and Metro are buying
increasing volumes of fruit, vegetables, meat and dairy products in
developing countries, but their exacting food safety and
environmental standards are driving small farmers out of business,
says ActionAid.
A spokeswoman for the Food and Drink Federation, which represents
British food businesses, yesterday recognised that the industry's
success "is closely linked to those at the beginning of the food
supply chain".
But she added: "Britain, the world's fourth largest food importing
country, invests heavily and provides an enormous market for
developing world farmers."
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