Iversen: Inflation or Consolidation?
I have been hearing lots of reasons for the continued rising consumer costs of products and services, but there is one culprit that is being (possibly intentionally) omitted….growing corporate concentration in the marketplace. The continued consolidation of American companies and businesses is taking its toll on the American consumers’ pocket books. Not only that, but it is also sucking the life blood out of family businesses and communities across this great nation.
Stop and think for a minute about the small companies that have been gobbled up by large conglomerate corporate entities. Ever wonder why the stock market surprisingly continues to rise, even in the wake of the Corona virus pandemic? Could it be that large corporations continue to grow while their small business competitors go broke leaving shoppers the only choice of take it or leave it? The stock market’s growth is being concentrated among the largest publicly traded companies at the expense of smaller family owned businesses.
As concentration increases, competition decreases – giving consumers fewer buying alternatives. It doesn’t matter what sector of business you look at….food, pharmaceuticals, health care, home building or telecommunications companies, they have all increased in size and decreased in the quantity of businesses that market these products and services. I just read the other day that North Dakota-based Dot’s Pretzels is being purchased by Hershey’s. I can’t help but wonder what this transition, and others like it, will do to small rural communities where manufacturing and packaging is currently being done.
In a competitive environment, companies aggressively compete to keep their prices down to retain customer loyalty and demand. In an oligopolistic environment, a few large companies control market power and can coordinate their prices and output of product. Corporations are using the excuse of rising costs due to inflation to raise prices to make record profits at the consumer’s expense. This is transferring wealth out of our local economies to corporate shareholders of globally-owned companies!
We as consumers like low prices and in a time when we struggle to keep bills paid this is understandable. We complain about not having shopping options in our rural communities while we grab items off the shelf at the newly opened Dollar General store. Wasn’t it nice when we had two local grocery stores in our communities to price shop. Now it’s a big box store conglomerate and maybe one family grocery store struggling to stay viable.
So what can we do? Can this trend be reversed? We can start by buying American when we have the choice, or at least buy from companies who manufacture and employ US citizens. Call your Senators and Congressmen and stress the importance of enforcing anti-trust laws like price fixing and anti-competing bidding practices to prevent the further monopolization of American companies. And, support legislation like mandatory Country of Origin Labeling for beef which helps differentiate beef from cattle born and raised in the United States on grocery store shelves from inferior imported beef products.
Mellette County, SD, rancher
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I had many lasting impressions of our year in Australia but the fellow on the phone wasn’t one of them.