[ "Its 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."]
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BIG FOOD RAKING IN HUGE PROFITS FROM PRICE HIKES AS US HUNGER
PERSISTS: ANALYSIS
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Jessica Corbett
May 10, 2023
Common Dreams
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_ "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
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latest inflation report, the watchdog Accountable.US put out a
new analysis
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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
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on January through March, the first quarter of this calendar year.
General Mills is one of a few companies
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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
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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."
For Kraft Heinz, the watchdog referenced _Reuters_reporting
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this month that it "raised its full-year profit forecast on Wednesday
on the back of higher prices and sustained demand for its packaged
food items." The analysis adds that the company "saw its Q1 2023 net
income increase by 7.1% YoY to $837 million and spent $491 million on
shareholder dividends."
Accountable.US noted that during the first quarter of this year,
"Mondelez—which touted price hikes for its double-digit increases in
revenue and earnings—returned $928 million to shareholders through a
combination of dividends and stock buybacks, after reporting $2.1
billion in profits, a 143% increase from last year."
The group used its new analysis to call out the Federal Reserve,
saying that "the findings are the most recent evidence that while
inflation is slowing, the Fed's single-minded policy of repeated
interest rate hikes [is] doing little to contain the primary driver of
rising costs—corporate greed."
The report also emphasizes recent admissions from economists that
corporate greed is driving inflation—which progressive organizations
and experts have been stressing for months in response to the Fed's
interest rate hikes.
As the analysis points out, _The Wall Street Journal_reported
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this month:
Consumers have... been unusually willing to accept higher prices
lately. Paul Donovan, chief economist at UBS
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Management, said businesses are betting that consumers will go along
because they know about supply bottlenecks and higher energy prices.
"They are confident that they can convince consumers that it isn't
their fault, and it won't damage their brand," Mr. Donovan said.
According to the consumer price index report released
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by the U.S. Bureau of Labor Statistics, "the food at home index fell
0.2%" from March to April. While cereals and bakery products saw a
slight increase, there were decreases for milk; nonalcoholic
beverages; fruits and vegetables; and meats, poultry, fish, and eggs.
However, the bureau's report also provides context from the past year:
"The food at home index rose 7.1% over the last 12 months. The index
for cereals and bakery products rose 12.4% over the 12 months ending
in April. The remaining major grocery store food groups posted
increases ranging from 2.0% (fruits and vegetables) to 10.4% (other
food at home)."
The Accountable.US analysis notes that in January and February,
"food-equity advocates warned that 'food insecurity for millions of
American consumers is worsening' despite overall inflation easing,
with higher numbers of food stamp recipients reporting 'skipping
meals, eating less, and going to food banks to manage costs.'"
The U.S. Census Bureau has estimated
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2023 that based on household surveys, roughly 25 million people
sometimes or often did not have enough to eat in the previous seven
days. The U.S. Department of Agriculture reports
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nearly 34 million people live in food-insecure households—though
research published
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month suggests that figure is likely an undercount.
Additionally, food insecurity figures don't provide a full picture of
how many families struggle to stay fed, as Claire Babineaux-Fontenot,
CEO of food bank network Feeding America, explained
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March: "The nuance is that some people are not 'food insecure' because
they get access to the charitable food system. That doesn't mean
they're able to achieve self-sufficiency."
U.S. households are also contending with losing assistance related to
the Covid-19 pandemic—including the end of the expanded child tax
credit
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universal free school meals
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and increased Supplemental Nutrition Assistance Program
(SNAP) benefits
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as food stamps.
As _Common Dreams _reported
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February, while experts warned that the end to boosted SNAP benefits
would cause a rise in U.S. poverty, Public Citizen
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Weissman declared
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decent society would not let this happen."
_Jessica Corbett is a senior editor and staff writer for Common
Dreams._
* food
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* corporate profits
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* hunger in the United States
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