May 21, 2010
Union says examining Walmart’s pricing pressure and buying power is critical to understanding the negative effects of concentration on food workers, farmers, poultry growers, consumers, communities and local economies
Normal, Ala. – The United Food and Commercial Workers International Union (UFCW), which represents more than 250,000 men and women in the meatpacking and food processing industry, released the following statement today regarding the Department of Justice/USDA workshop on agriculture and antitrust enforcement issues in the poultry sector:
“We believe that these historic hearings represent an enormous opportunity to rebuild and revitalize rural America by ensuring justice and fairness for working men and women across the food industry.
“At the first DOJ/USDA hearing held in March, Secretary of Agriculture Tom Vilsack cut to the heart of this issue when he said the central focus of these workshops was to determine if the marketplace was ‘providing a fair deal for all.’
“To answer that, it is critical that the voices of individuals across the food supply chain—from workers, to growers, to farmers—be heard and for the entire industry to be closely examined. That means analyzing the industry from the farm to the shelves of our grocery stores. It means examining how big retailers, such as Walmart, are driving concentration through their enormous buying power and the pressure they impose on suppliers.
“Make no mistake about it, Walmart’s actions affect every level of our nation’s food supply chain—and they have no intention of loosening their tight chokehold on our food production and distribution systems.
“To secure its rural stranglehold, Walmart uses its enormous footprint, coupled with its pricing power, to literally dictate how whole industries must operate. They reach deep inside a company, effectively influencing every aspect of a supplier’s business operations. This inevitably leads to lower wages for workers, less money for farmers, growers and ranchers and fewer choices for consumers.
“As one industry publication recently wrote, ‘The costs of running processing businesses, from transportation to utility costs and insurance premiums, continue to increase along with pressures from retail customers to not raise prices. Leading the charge for resisting price increases is Walmart, which has informed its suppliers it will not allow price increases in the coming months.’
“Walmart’s pricing strategy leads to incredible pressure on producers, customers, competitors, farmers and workers. It squeezes workers’ wages and means less money in the pockets of hardworking poultry growers. It often drives industry concentration and leads to the elimination of healthy competition in the marketplace—on products ranging from poultry to pet food.
“If we truly want to address anti-competitive practices in agriculture, we must treat more than just the symptoms, we must treat the disease—and Walmart is the disease.
“If Walmart’s actions are not addressed, if the downward pressure they put on workers, businesses, growers and farmers is not vigorously challenged, we will continue to see a destructive race to the bottom that will destroy strong communities and wipe out good rural jobs that are the backbone of our nation.
“If we really want to rebuild our nation’s food system, if we really want to ensure that our agriculture sector is providing a fair deal for all, it is critical that the Obama Administration addresses Walmart’s unprecedented ability to hold farmers and packers captive to their pricing schemes and supply chain management practices.
“The ugly truth is that Walmart has created a system that pits workers and farmers against each other, fighting for the scraps that are left over after company executives try to wring every cent out of our nation’s food supply chain to bolster their profits. This system is devastating to rural innovation, it devalues farming economies and it destroys what were once solid, middle-class packing and processing jobs.
“We applaud the efforts of Attorney General Holder, Secretary Vilsack and Assistant Attorney General Varney and look forward to rigorous enforcement against business practices that hamper competition, hurt workers, harm communities and hinder our nation’s ability to provide good, quality food to America’s kitchen tables.”