'Open warfare' was how one executive from Unilever, the Anglo-Dutch multinational, described the competition for a share of the food market. With estimates that global sales of packaged food reached $2.8 trillion at the beginning of the 1990s it is no wonder that there is stiff competition for a share of the profits.
Britain is one of the main arenas where the battle for a share of the profits is carried out. A glance at the UK top 100 companies shows how the food industry is dominated by some very rich players - giant retailers such as Sainsbury and Tesco are both listed in the top ten and are locked in head to head confrontation. Others include food manufacturers such as Grand Metropolitan, Dalgety, Bass, Cadbury-Schweppes, Tate & Lyle, Whitbread, United Biscuits, Guinness. The food industry in Britain today is big business, employs hundreds of thousands of workers, and is crucial to the economy.
A relatively small number of companies dominate certain sections of the food market on a global scale - this includes enormous multinationals such as Nestlé, which in 1992 was the world's biggest food company with a world turnover of $37.6 billion, Nabisco, Heinz, McDonald's and Coca Cola. The power of these companies, and their brands, attracts consumers and has turned food into one of the world's largest industries. These companies determine what is produced, what we eat and how much we pay for food. Behind the talk about customer care, loyalty cards, food safety and consumer choice is a multibillion pound industry in which the stakes are enormous.
Take the competition between the big four food retailers in this country - Sainsbury, Tesco, Asda and Safeway. At the end of the Second World War there were no supermarkets in Britain. Sainsbury opened its first supermarket in 1950. Now the vast majority of grocery shopping is in supermarkets. Tesco has just announced profits of £675 million, and with 545 stores employs over 153,000 people - one of Britain's largest employers. Supermarkets now account for more than half of all the fruit and vegetable sales, three quarters of all bread sales, nearly half of all red meat sales and over half of all poultry sales. By the year 2000 it is estimated that over 70 percent of all fresh produce will be sold through the main four supermarkets. The battle going on at the moment is about seizing this profitable market.
Other sections of the food industry also offer rich rewards. The snack food market alone is worth more than £3 billion a year in sales. By far the most significant change in the food economy is the growth of concentration in each food sector, so that by the mid-1980s just two or three companies were dominating the market in many foods. In confectionery three companies - Rowntree, Cadbury and Mars - control over 60 percent of the market. And in frozen ready foods three companies - Unilever, United Biscuits and Nestlé - share over 65 percent of sales. Just two companies - Heinz and Campbell - dominate the canned soup market. And in the fast food business, McDonald's and Burger King dominate a multimillion pound burger market. Unilever, the Anglo-Dutch multinational, is one of the world's largest food producers with sales of $42 billion a year. It dominates global markets in products such as margarine and ice cream and employs nearly a third of a million people internationally.
For some the food industry has meant rich rewards. David Sainsbury, chairman of the food giant, owns some 317 million shares and has a personal wealth of £1.38 billion. In 1994 he received a dividend cheque for £33 million. Edmund Vestey controls a meat empire and has personal assets of £320 million. Vestey's grandfather set up Union Cold Storage in Liverpool in 1897 with the simple idea of meat for the working class. Newly invented cold storage techniques would enable them to import cheap meat from around the world. Bernard Matthews, the turkey and food producer, heads a company worth more than £60 million, although workers at Matthews' factory are paid just £4.23 an hour. In fact, despite the enormous profits poor wages are a feature of those who work in the food and agricultural industry. For farm workers pay rose by only 2 percent between 1991 and 1994 despite the fact that total farm incomes went up by 139 percent. The current hourly rate for workers is only £3.83 an hour - some £75 a week behind average production wages. While the overall cost of food production has declined over the last 30 years, total profits for those at the top have increased enormously.
But what has dominated the manufacture and production of the food industry over the last 15 years has been a deregulation of the market, greater competition between companies and a decline in standards of nutrition. In their pursuit of profits companies are prepared to go to great lengths to decrease the nutritional value of food, and in this they have been helped by governments. For example, in 1984 the Tories abandoned the regulations determining the minimum meat allowed in various meat products (such as precooked meat meals). The result was that the meat content was substantially reduced, replaced mainly by fat or water. Nor have the Tories been too concerned about imposing food hygiene restrictions - local authorities have too few food officers, and the number of port health authority officers has fallen by 25 percent over the last ten years.
Now it is not uncommon to have reports of food contamination or food poisoning. The BSE scandal is the latest in a long line of food scares. The number of salmonella cases (food poisoning from chicken and eggs) increased from 1,000 to 15,000 a year in the mid-1980s.
The adulteration of food is not an aberration but is a natural consequence of having the market dominated by a few companies locked in cut throat competition. The reasons for the BSE scare lie not in some natural disaster, but in the deregulation of the rendering industry and the need to fatten cattle as quickly and cheaply as possible. The whole production of food - from the farm to the supermarket, or the processing plant, to the consumer - is dictated not by the needs of those who eat it but by the profits of the multinationals. The agricultural industry is dominated by big business - the farmers we see on television feeding or milking cattle are now more likely to be farm managers employed by a large landowner as opposed to a small time farmer. They are employed, like publicans are employed by the large breweries, to run and keep up the farm, contract labour and make profits. British agriculture is one of the most productive in Europe with high yields from intensive farming, although it is still behind Holland in terms of beef and fruit and vegetable production, and Denmark with bacon. France, Ireland and Spain all rely on importing British food, and Germany and Japan represent the largest food import markets in the world. Britain has a well developed meat, vegetable, fruit and dairy industry. Cereals and cereal derived products account for over £1 billion of exports, and meat makes up £0.8 billion of exports every year. Last year farming profits were the best for 20 years, up by almost a third to £4 billion. Agricultural production is now governed by the same pressure and methods that dominate other industries like the car industry. Just-in-time methods are used, ensuring that the supply of produce reaches the shop in the least amount of time possible. And this applies to the rearing of animals as well.
The food industry has its fair share of representatives in the Tory party. Former secretaries of state for agriculture include William Waldegrave, director and shareholder of Waldegrave Farms Ltd, and Michael Jopling, landowner and farmer. The recent deal announced by the Tories to try and salvage the beef industry will cost £938 million for the first year and over £550 million for following years. Farmers will get £500 for each animal destroyed. Those farm and food workers who have been laid off as a result of the BSE scare will receive nothing.
Agriculture and food production operates like a cartel with a few companies dominating the market, rigging supply and price as a guarantee of profit. In Britain the dairy industry is one of the most profitable, dominated by just five companies, and 70 percent of all dairy products are sold through just six supermarkets. Tate & Lyle and British Sugar between them produce more than 90 percent of Britain's sugar - a market worth nearly £1 billion annually. And in the United States farming is now America's biggest business with a workforce as large as that of the steel, car and transport industries combined. Poultry production in the US is now highly centralised - today 97 percent of all American poultry is produced by 49 chicken farmers.
It is certainly true that anarchy of the market is associated with food production, but this has frequently been helped by government policy and intervention. In Europe agricultural production is dominated by the Common Agricultural Policy (CAP) which fixes prices and regulates production. In 1995 the EC ordered the destruction of 2.5 million tonnes of fresh fruit and vegetables to keep prices artificially high. Farmers were paid an estimated £500 million for this and the produce was dumped in trenches while the price of food in the shops increased. The CAP allows fruit and vegetable growers to claim for payments just below market rates, which stops prices falling when there is a good harvest. As Ann Davison of the Consumers in Europe Group said, 'It is ludicrous that low income families are unable to afford to buy fresh fruit and vegetables because the prices are kept so high while cheaper produce is kept off the market.'
Both the US and EC changed policy in the early 1990s, moving from what they saw as the public relations disaster of having huge grain mountains, and grain dumped at sea, to a policy of paying farmers to leave land set aside. The EU has a policy of setting aside 12 percent of land. The US followed a similar policy, taking out 56,000 miles of cropland. Lost production has increased pressure on the world's food resources - but the profits remain. The losers in all this are ordinary people. If you are poor and live in certain parts of the world, there is a possibility of starvation. If you are working class in the richest capitalist countries, you spend your time looking for the cheapest bargains and eating the least healthy food just to make ends meet. Food production is a political issue. We now have the ability to feed all the world many times over. Advances in agricultural techniques, in the use of pesticides, fertilisers, irrigation and machinery allows just a small percentage of the population to feed the vast majority. Intensive farming enables us to produce cheap meat for all.
It does not need to be produced by feeding animals dead carcasses or contaminated meal. This happens not because people 'demand' cheap meat, but because the drive for profit looks to more and more ways of cutting corners. This competition between just a few companies has led to the absurdity of some sections of the world's population being constantly enticed to eat even greater amounts of food while others go hungry. The dominance of the market means governments pay farmers not to produce food while prices rise and others go hungry. The capitalist system has failed miserably to satisfy one of the most basic human needs - its end, and the end of just a few benefiting enormously from the continued misery of millions is now a human necessity.