Marketing Viewpoint by Ruth Winett
What Does Market Concentration Cost You?
From social media to food producers, a few large companies dominate many industries. On July 9, 2021, the Biden Administration issued an Executive Order to increase competition and reduce industry consolidation. Among the businesses cited in the executive order were agribusiness and Internet platforms. But, a small number of companies also dominate other industries, such as the insurance and especially the food industries.
For example, three or four companies have captured about 80% or more of the market for 16 popular foods. Here four of the most concentrated* food sectors:
*The concentration ratio is usually the sum of the market share of 4 companies, here 3 or 4 companies.
Consolidation adversely affects smaller businesses and all of us as customers. Consolidation:
In a vast country, such as the US, larger companies have an enormous advantage over smaller companies that cannot afford the financing, infrastructure, marketing, and distribution systems of a larger company. Furthermore, larger companies have more political heft and can influence legislation that favors them.
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