Binyamin Appelbaum | Break Up Big Chicken – The New York Times

Mr. Appelbaum is a member of the editorial board.

“President Biden wants to lead a revival of antitrust enforcement, a campaign aimed most obviously at curbing the behavior of feral tech companies.

But Mr. Biden can’t achieve his goal of expanding fair competition in the United States solely by wrangling with Big Tech. To succeed, he’ll need to confront Big Chicken, too.

Most chicken that Americans eat is processed by a handful of big companies because, in recent decades, the government gave its blessing to the consolidation of poultry processing, along with a wide range of other industries. The unsurprising result: In recent years, the surviving companies took advantage of their market power to prop up the price of chicken, overcharging Americans by as much as 30 percent.

Evidence of the industry’s misconduct became so blatant — thanks in part to lawsuits filed by wholesale poultry buyers — that regulators were roused from complacency. Beginning in 2019, the government has filed a series of charges against the companies and their executives.”

Excellent piece, and also good comments, such as:

Jack Sonville
Florida9h ago

I’ve been in Corporate America board rooms for 35 years and much of that in older, more established industries. In general, they do not have the innovation DNA of an Amazon or an Apple or a Google. Over the years they have gutted their R&D functions to save money and essentially use a commodity business model–try to be a low cost provider, take higher-cost capacity (supply) out of the market, and charge as high a price as possible whenever possible. So in response to Wall Street pressure to significantly grow, they really only have one option: Buy their competitors and consolidate their industry. This allows them to find “synergies”, which in antitrust-speak is supposed to mean lower prices and other benefits to the consumer, but which really means reducing cost by firing employees made redundant by the merger of two companies, and then taking more capacity out of the market and/or using their now-greater market share to raise price. It’s been frustrating to watch, over virtually my entire career, the same story play out time and again. Companies tell the DOJ and FTC in their antitrust filings that consumers will benefit from these mergers, but they rarely if ever do. And government economists buy the story. These mergers generally reduce incentive for innovation, eliminate jobs, put downward pressure on industry compensation, and lead to higher prices through reduced capacity. Good for shareholders? Maybe. Good for consumers? Almost never.

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