For Washington, capitalism is yes, but not to excess. Thus, the White House wants to break the market powers in the meat sector. The Biden administration therefore unveiled on Monday a plan supposed to put more competition in this industry, dominated by a few large companies which take the opportunity to raise prices while compressing the income of ranchers according to the White House.
“I have said it before and I will say it again. Capitalism without competition is exploitation. This is what we see in meat and poultry, “blasted Joe Biden by launching Monday a virtual round table devoted to the subject. “Small farmers and independent breeders are forced to cease their activity”, explained the president while criticizing the “massive profits” made by the giants of slaughtering, processing and packaging, while prices for consumers are climbing.
A check for a billion
Believing that the meat sector is “a textbook” of the misdeeds of too much concentration, the White House recalls, for example, that in terms of packaging and processing of beef, the four largest companies in the United States control 85% of the market. These are Cargill (United States), Tyson (United States), JBS (Brazil) and National Beef (subsidiary of the Brazilian company Marfrig).
In total, Washington will free up a billion dollars of public money to support, in different ways, the development of “independent” meat processing and packaging infrastructure, particularly with regard to slaughter. The federal administration also wants to “strengthen the rules that protect farmers, ranchers and consumers”, which they say were relaxed during the presidency of Donald Trump.
The dissatisfied Chamber of Commerce
These announcements were immediately criticized by the American Chamber of Commerce. “As with so many other products, the reasons for the rise in meat prices are increased demand, disruption of supply chains due to Covid-19 and higher production costs”, writes Neil Bradley, vice-president of the organization which defends American companies, in a press release. “The administration is trying to use rising prices to justify its agenda of overturning decades of political consensus around competition policy to make way for regulation guided by the principle that the government would know better. that everyone ”, he gets carried away.
The executive, faced with high inflation which is undermining the popularity of Joe Biden, has made the strengthening of competition one of its main axes of economic policy. Before the meat industry, he had already taken the hydrocarbons sector in his sights, criticizing large companies for not passing on the drop in oil prices at the pump.