ICYMI: White House Releases New Data Showing Meat Processing Companies Taking Advantage of Market Power to Raise Prices and Grow Profit Margins
December 13, 2021 Groundwork Collaborative
On Friday, the White House released a new blog post highlighting how corporate greed is driving recent price increases, with a specific focus on price-gouging by meat processing companies. The blog came out following the release of the latest Consumer Price Index, which demonstrated how corporate greed is driving price hikes, including through decades of disinvestment in our supply chains and widespread permissiveness toward corporate extraction.
Together, these factors have weakened our economy’s responsiveness to crises and are causing millions of families to struggle during the holiday season.
“It is great to see that the Administration is focused on addressing the real culprit behind recent price increases: corporate greed,” said Rakeen Mabud, chief economist at Groundwork. “The squeeze that so many families around the country are feeling is directly tied to concentrated corporate power that has exacerbated supply chain issues — facilitating price-gouging so that corporations can enjoy record profits.”
Key excerpts from the White House’s post:
“Some claim that meat processors are forced to raise prices to the level they are now because of increasing input costs…but their own earnings data and statements contradict that claim. Their profit margins—the amount of money they are making over and above their costs—have skyrocketed since the pandemic…If rising input costs were driving rising meat prices, those profit margins would be roughly flat, because higher prices would be offset by the higher costs. Instead, we’re seeing the dominant meat processors use their market power to extract bigger and bigger profit margins for themselves.”
“Here is the bottom line: the meat price increases we are seeing are not just the natural consequences of supply and demand in a free market—they are also the result of corporate decisions to take advantage of their market power in an uncompetitive market, to the detriment of consumers, farmers and ranchers, and our economy.”
Groundwork has been sounding the alarm for months about inflation and corporate greed and sharing research, analysis, and messaging guidance to push back on misinformation:
- On Friday, Groundwork’s chief economist Rakeen Mabud called out the corporate greed driving the latest increase in the Consumer Price Index.
- As Rakeen told the New York Times: Our economy has empowered big companies “to jack up prices on the backs of workers and consumers…That’s exactly what we’re seeing now. And that’s exactly why this fear-mongering around inflation is proving so effective.”
Groundwork Collaborative: The Groundwork Collaborative’s mission is to advance an economic vision for strong, broadly shared prosperity and true opportunity for all. Visit our website and follow us on Twitter @Groundwork.