News

Big Food Raking In Huge Profits From Price Hikes as US Hunger Persists: Analysis

COMMON DREAMS, Jessica Corbett, May 10, 2023

“It’s shameful that Americans are left food insecure and have to skip meals while corporations and their wealthy shareholders enjoy the spoils of supersized profits under unjustified price hikes.”

As the U.S. government on Wednesday released its latest inflation report, the watchdog Accountable.US put out a new analysis detailing how Americans face food insecurity while major food corporations are padding their profits with price hikes.

“Big Food’s staggering increase in earnings shows they did not need to raise prices so high on consumers but did so anyway to maximize record profits,” said Liz Zelnick, director of Economic Security and Corporate Power at Accountable.US, in a statement.

“It’s shameful that Americans are left food insecure and have to skip meals while corporations and their wealthy shareholders enjoy the spoils of supersized profits under unjustified price hikes,” she added. “It’s clear that the food industry will not hold itself accountable. It’s time Congress do more to rein in corporate greed, one of the main factors currently driving up costs for families.”

“It’s time Congress do more to rein in corporate greed, one of the main factors currently driving up costs for families.”

The Accountable.US report takes aim at General Mills, Kraft Heinz, and Mondelez—three of the top “at home” food companies in the United States based on market capitalization—focusing on January through March, the first quarter of this calendar year.

General Mills is one of a few companies that dominate the U.S. breakfast cereal market, with brands including Cocoa Puffs, Cookie Crisp, and Lucky Charms. Kraft Heinz is known for not only ketchup and macaroni and cheese but also Jell-O, Kool-Aid, and Philadelphia Cream Cheese. Mondelez’s top brands include Chips Ahoy! and belVita.

The companies’ combined net earnings for the quarter rose by 51% year-over-year (YoY) to a combined $3.47 billion, and the trio collectively spent over $1.3 billion on shareholder dividends, Accountable.US found. Of the three, only General Mills saw its earnings drop from the first three months of 2022 to the same period in 2023—though the company still spent more on dividends this year compared with last year.

The first three months of this calendar year were the third quarter of General Mills’ 2023 fiscal year. Accountable.US cited Reuters‘ March 23 report that the company “raised its fiscal 2023 forecasts for a fourth time after beating estimates for quarterly results, helped by price increases and steady demand for its packaged-food products.”

The watchdog also highlighted that General Mills “saw its net earnings increase by nearly $2 billion YoY for the first nine months of FY 2023, as the company spent over $2.16 billion on its shareholders through a combination of dividends and stock buybacks.”

Read More: COMMON DREAMS