Last updated on March 27th, 2015
The mega food company merger of Heinz and Kraft will result in the third largest food and beverage company in the United States, the fifth largest in the world.
Question: How often are the results of any merger – good for the consumer? or the employees?
Is the systemic risk that is associated with increasingly putting all of our ‘eggs in one basket’ (our food), a good thing?
The food industry is about to become even more concentrated than it already is, as the giant combined company will be named The Kraft Heinz Company.
H.J. Heinz Company and Kraft Foods Group, Inc. (NASDAQ: KRFT) today announced that they have entered into a definitive merger agreement to create The Kraft Heinz Company, forming the third largest food and beverage company in North America with an unparalleled portfolio of iconic brands.
The transaction is subject to approval by Kraft shareholders, receipt of regulatory approvals and other customary closing conditions and is expected to close in the second half of 2015.
Thoughts:
How long until things merge to just one food company? Would that be even better? (sarcasm)
I don’t know about you, but I have a problem with these enormous mergers (in nearly any industry). The merger is always solely about money, Wall Street, stock holders, and the pockets of the corporate leaders. Of course it is. While I have nothing against capitalism and making a profit, I do know that following any merger – there are slashes and cuts to budgets, a cheapening of the product(s), and often layoffs. This is in an effort to line the pockets of the merger principals and of course, the stock holders. But as a consumer, are we getting the short end of the stick?
I believe that (generally) as a consumer, we get an inferior product and/or a product that costs more (often cleverly). For example, who’s to say that the bean counters over at the new Kraft Heinz Company won’t find a way to cheapen the food product in some way? Who’s to say they won’t trim another half ounce off the size of the ‘package’? Or maybe my 38 ounce bottle of Heinz ketchup will become 34 ounces sometime after the merger? Or maybe they will ‘adjust’ their secret ketchup formula to trim off some cost – will it still be ‘ketchup’? (Time to start making my own ketchup?)
If you think that much of our existing ‘processed’ food supply is less than nutritionally ideal today, then how will it be tomorrow when even more focus is put upon cost cutting for profits? Will the food always be ‘food’? In my opinion, much of it already is not ‘food’! (at least in a traditional sense of the word food).
In addition to knowing that as a consumer I will probably get ‘screwed’ somehow because of the resulting ‘watering down’ or price increases or package reductions, even more concerning to me is the notion of just a few giant food companies controlling our food supply! I just don’t like that. As a preparedness-conscious person, my instinct tells me that there is MORE risk when there are fewer choices (or companies in control of our food supply).
It is so very difficult for small and medium size businesses (even some ‘large’ businesses) to successfully compete in a food industry of mega giants – especially with an overburdening of regulations that only they can afford – and the results are fewer and fewer ‘local’ or regional sources within the food industry chain (including farming and supply, processing, independent products, distribution, and locally owned grocery stores or chains).
The corporate profits from the mega giants do not end up in your town or region. The only exception that someone will argue is that if you own that company in your 401K (for example) then you may reap the reward of a stock price going up. But I would argue that you and your community or region will lose more by shifting profits to the mega giants who are not loyal to your community, and who are not loyal to any nation, and who will only EXTRACT dollars from you, me, and our community. That’s just my general opinion…
What say you??
While I may agree with your sentiments at the end of the day these company’s are there to make money for the corporation and shareholders. saying that I do think monopolies are a bad idea. Any of us that are old enough remember the old Lilly Tomlin skit on SNL ” We don’t care. We don’t have to. We are the phone company ” spoof against Ma Bell.
Interesting to say the least.
Two comments if I may
First; My mother always said when I was growing up to never eat something that her Grandmother could not pronounce. Read the labels, know what your eating. If you cant pronounce “fructooligosaccharides”,”Atrazine”, or “Zeranol”(yes all real words) than maybe you should not be eating it??? Now I’m not an Organic Nut-Job but these chemicals that are in the food nowadays are deadly. Here is a simple one for you-all, did you know that Margarine goes through 7 processes, 2 of which are 100% poisonous to humans. Yummmmmm
Second; Buy local, go to the Farmers Markets, Trade with your neighbors, support your neighborhood stores. If you only buy from Wally World than that’s what we will all end up with eventually.
Final thoughts, are mergers good or bad? It’s sort of like the sluverment, Is big sluverment good or bad? The more power you give one particular segment of society the more and more abuse you will have. The more abuse the worse off it is for the individual. We all suffer in the end for uncontrolled power. Take this and add the fact Food is one of the essentials of life (food water shelter security) you have a time bomb waiting to go off in our faces. Just think about how easy it would be for the sluverment to walk in and take over the food industry if it’s already under one or two roofs.
Just Saying
NRP
It is called Fascism. Learn to love it, or else.
Concur with poorman and NRP. Agribusiness and food preparation, distribution are too closely connected. It’s a shame that so few people have so much control over our resources. When wally world came into our county they undercut everybody else. Two large grocery stores folded and then wally worlds prices went back up. I can’t help but wonder about how much they are involved in farming, setting prices for what they will pay and such. It seems like the local farmers are forced out of any significant markets. I too urge all to buy local when you can’t grow it yourself. We will probably not be able to avoid doing business with corporate giants though. Sad.
They are very very much in the farmers pockets. I have a good friend that grows Pinto Beans in Southern Colorado, he raises about 5000 acres of just Pinto’s. Wally Worlds buyers, AKA Mobsters, paid him a visit and “told” him what he was going to get for his product, 20% under his normal price. When he contacted his other buyers they all told him they could not buy from him anymore.
How’s that for Communism/Marxism/Fascism?
NRP
This is Typical of them not the exception.
Not a good move for the everyday citizens , I wonder what John Kerry’s influence night have helped in this merger , remember folks his wife is the heir to the Heinz fortune , I guess this will seal his membership in the Bilderbergers clique , being that only the richest folks in the world need attend . This is part of getting all of the food industry in one business so that in the future we will have to follow they’re guidelines or starve , I myself am a Christian and to me this appears as part of pushing toward the mark , as they would control everything , the way things are looking cash will not be around much longer , the way things have been heading since I was even a child appears that it ISPs just all part of the plan to control our lives , once cash is out of the way who watches over our credits or chits or whatever they will call it , why that would have to be the government wouldn’t’t it or a body run by the government , that would be the only way the government would accept this , so now there is more control , then they would have to have a a fool proof way to be sure no one can cheat the system , so what better way than by placing a chip in you with all revelent data about you , sound like a sci-fi movie ? Well think again , because they are doing it now to pets , and even some folks in some countries . OK case in point , when you go to the hospital , they now have paperless records , all on computer now , all of your medical records are on there along with some of your other private info , all of this is kept on servers in Kansas City , guess who has all of this contracted out well it is Uncle Sam , this is part of Obamacare , so now there is a file on every one who has gone to or will go to a Dr. a hospital , or any medical treatment facility , just wanting to share with Ya’ll that the control is there and creeping more into our lives everyday , and no I am not a nut-job. Be prepared and ready . Keep your powder dry .
Excellent point Andy.
It’s going to make the holocaust look like a cake walk.
And if anyone really thinks the sluverment cares one little shit bit about the people, think again
NRP
Gosh, I can’t think of one Heinz or Kraft product I’ve purchased for quite some time now. Mainly, just because I don’t like or use their processed foods. Also, has anyone else noticed that (it seems) most Heinz and Kraft products are “WIC” approved?
Its now owned by the “Butcher of Omaha”. Has contributed over 1 billion dollars for Abortions.
I am more concerned by foriegn buyers/owners of our companies than I am of two large companies merging. I am much more concerned by our dependence on foriegn countries for essential and even strategic products and materials. I am far more concerned by the massive immigration to our country without any knowledge of the immigrants background or intent.
…all good things to be concerned about! There certainly is plenty to go around…
haven’t seen anything about older folks and ‘prepping’; are we welcome in the community or considered ‘over the hill’? lol
Older preppers are “the bomb”, yes you are welcome!! This food merger sounds like “soylent green” ((have to be 40+ to know this humor)
“it’s people”
I’m 61 and my mother is 92, and I send her these blogs all the time, she reads and comments all the time. So YES!!!!!! please comment, I believe the more comments we had the more we all learn. And regardless of what some of these young whippersnappers say, We do have a few good things to contribute LOLOLOL
FYI, again to all those young whippersnappers out there, “over the hill” is cool. For me it’s a hell of a fun ride down the back side, I’m enjoying the view and the easier life. Still working but have figured out being the one telling others how and what to do is the ONLY way to go HAHAHAHAH.
Welcome to the Blog MAdmimi.
NRP
Groovy! I thought us 61 year olds were the whippersnappers! 🙂
HAHAHA, thanks Beach’n Gata Love the olden’s
And as we know, once you’re over the hill you pick up speed.
The Sherman Anti-Trust Act needs dusting off. There are far, far too many mega corporations that need to be broken down in to tiny remnants of their former selves. Concentrating food in to huge megalopolies not only eliminates competition, it makes transparency within the process impossible. Just like J.P. Morgan, when asked if it was possible to actually audit a company of this size every single accountant will tell you no.
They are not held accountable and if they are “prosecuted” for some offense or another, they simply pay the fine as a cost of doing business and pass the loss back down to us.
No!
Kraft is a major employer in my county. I’m concerned a merger will demand layoffs, which is never a good thing for a local economy.
Our food is already ‘not food’. When you have to read the label to find out what 25 ingredients are in that can of (insert any food item here), then it isn’t really food.