- 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
- 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 NestlÈ, 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. NestlÈ,
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
- 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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