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Faced with galloping inflation, Joe Biden announces a “meat” plan to attack the virtual monopoly of the major majors in the sector.
In the sights of Joe Biden, the giants of slaughter, processing and packaging of meat. Today, four majors control 85% of the beef industry in the United States. Unacceptable for the American president who denounces their massive profits to the detriment of breeders and the purses of consumers.
A billion dollars to compete
Joe Biden is therefore proposing a billion dollars to support the development of independent infrastructures, in order to compete with large groups. A policy which is already provoking the anger of the American Chamber of Commerce which denounces a return of price regulation, after decades of “ consensus around competition policy ».
In the land of liberalism, the concentration which affects the meat sector as well as other sectors is structural: it has been years since, in order to make economies of scale, some groups have taken dominant positions, leading to the disappearance of small family businesses. Result: the sector is monopolized by behemoths such as Cargill, present both in meat processing, but also upstream in livestock feed.
This law of the strongest has hitherto rather benefited the consumer, since it has lowered prices… Inflation today is hardly attributable to them, since it is clearly cyclical points an expert and linked to the pandemic. The United States was in fact particularly affected in 2020 with a lot of absenteeism in the slaughterhouses of farmers who could no longer sell their meat while prices soared in stores.
Little impact to expect for the global market
While the policy of weakening the majors through aid to competition may be helpful in cleaning up and regulating the sector, it may not be the key to lower consumer prices, nor to a reduction in consumer prices. breath of fresh air for breeders. Unless we also review relations with large food distribution whose margins are often envious.
If this restructuring of the meat industry in the United States really sees the light of day, it should not have an impact on the world market: the United States has indeed lost its supremacy against Latin America in the sector itself. ‘they remain a major player. And the country that sets the prices remains China, the biggest buyer in the market.
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