[Plura-list] A giant grocery merger will send "inflation" through the roof

[Cory Doctorow]

Read today's issue online at: https://pluralistic.net/2022/10/17/united-states-vs-vons/

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Today (Oct 17), I'll be presenting remotely to CREATe's Copyright Evidence: Synthesis and Futures conference in Glasgow:

https://www.create.ac.uk/copyright-evidence-synthesis-and-futures/


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Today's links

* A giant grocery merger will send "inflation" through the roof: The Kroger-Albertson's merger will trigger massive price-hikes.

* This day in history: 2002, 2007, 2012, 2017

* Colophon: Recent publications, upcoming/recent appearances, current writing projects, current reading

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👲🏿 A giant grocery merger will send "inflation" through the roof

Sometimes it's hard to know why prices are going up. Between the oil shock, a tight employment market and the climate polycrisis, is it even possible to tell if companies are using the widespread *belief* in inflation to hike prices? Uh, yeah, as it turns out, we *absolutely* can.

Yes, it's hard to peer into the minds of executives at large companies and know whether their price hikes are due to greed or necessity. But we don't have peer into their minds! We can just dial into their investor calls, where top execs of giant companies *brag* about hiking prices under cover of inflation:

https://pluralistic.net/2021/11/20/quiet-part-out-loud/#profiteering

These guys can't help but boast about their price-setting power, whether that's Colgate-Palmolive CEO Noel Wallace boasting that his company is "good at pricing":

https://www.fool.com/earnings/call-transcripts/2021/10/29/colgate-palmolive-company-cl-q3-2021-earnings-call/

Or Procter and Gamble CFO Andre Schulten saying, "We have not seen any material reaction from consumers, so that makes us feel good about our relative position."

https://www.businessinsider.com/labor-shortage-customers-higher-prices-wages-jobs-staff-salaries-employment-2021-11

The grocery barons are particularly boastful. Here's Kroger CFO Gary Millerchip explaining why higher wholesale costs have not led to an erosion of the company's massive margins: "We’ve been very comfortable with our ability to pass on the increases that we’ve seen at this point, and we would expect that to continue to be the case."

https://www.wsj.com/articles/u-s-companies-bet-shoppers-will-keep-paying-higher-prices-11635067802

Kroger is about to get a *lot* more pricing power, because it is merging with Albertsons, a company that already bought Safeway, Haggen, Acme, Jewel Osco, Shaw's, Pavilions, Von's and too many others to fit in here.

But there are some companies Albertsons *definitely* doesn't own, because they're owned by *Kroger*: Ralph's, Dillon's, Food 4 Less, Fre _Meyer, Harris Teeter, King Soopers, Mariano's, and many more. As David Dayen writes for *The American Prospect*, "the illusion of choice in supermarkets masks the dominance." and this the "preposterous" $24.6b merger will produce a price-gouging juggernaut:

https://prospect.org/power/proposed-kroger-albertsons-merger-would-create-grocery-giant/

The leadership of both companies assure us that they will not use their combined might to raise prices. These are, of course, the same leaders who have been publicly *boasting* about their ability to raise prices thanks to their existing scale. With five giant companies controlling nearly the entire US grocery market, it's not really a mystery why grocery prices are up 13% in the past year, while eggs are up 30.5%, chicken up 17.2% and coffee up 15.7%:

https://twitter.com/ryanstruyk/status/1580539772212502530

As Kroger CEO told his shareholders: "a little bit of inflation is always good in our business" because it lets him raise prices and "customers don’t overly react."

The architects of the deal are the resassuringly named PE giant Cerberus Capital, who stand to make $7b from the merger:

https://www.forbes.com/sites/brandonkochkodin/2022/10/14/here-are-two-less-known-winners-in-the-kroger-albertsons-merger/

These are the same motherfuckers who bought up local hospital chains, debt-loaded them, and then threatened to shut them down at the start of the pandemic if they didn't get massive, no-strings-attached public subsidies:

https://pluralistic.net/2020/04/04/a-mind-forever-voyaging/#prop-bets

Cerberus is also behind Spain's rental affordability crisis, having bought up innumerable buildings and jacked up the rent, while cutting maintenance and evicting the shit out of anyone who complains:

https://pluralistic.net/2021/11/24/no-puedo-pagar-no-pagara/#fuckin-aardvarks

As Dayen writes, this merger turns on a bet: that the FTC will not block it, but rather, rely on the tired, discredited idea of "conduct remedies" - where a the companies undertaking a giga-merger have to pinky swear that they won't abuse their market power. This always requires a monumental act of credulity, but that's doubly true with these companies.

Back in 2015, Albertsons merged with Safeway, and promised that it would lessen its control over groceries in western states by selling off 168 stores, mostly to Haggen, a company that was "woefully underequipped" for such an expansion. Nine months later, Haggen went bankrupt, and Albertsons bought them, along with the dozens of the stores it promised to sell off, at 80% off, turning a massive profit on the scam:

https://www.economicliberties.us/our-work/courage-to-learn/

Now, Albertsons is playing Lucy-with-the-football, promising to sell off 100-375 stores as a condition of the Kroger merger. Only an idiot would trust this promise. Luckily, as Dayen writes, FTC Chair Lina Khan is no idiot. She's turned antitrust into a "shooting war" by declaring that the age of rubber-stamped mergers is over:

https://mattstoller.substack.com/p/the-antitrust-shooting-war-has-started

Fittingly, that age began with manufactured outrage by the business lobby and its priesthood at the University of Chicago School of Economics over United States v. Von's Grocery Co, where a 1966 grocery store merger was thwarted.

https://supreme.justia.com/cases/federal/us/384/270/

Vons became the rallying cry of the pro-monopoly lobby and their cult of low-information voters, the "Beghazi" of its day. To hear them tell of it, the insistence that grocery consolidation was bad was a mere superstition, one that made life worse for everyone in service to an incoherent ideology.

But grocery mergers *are* bad. They produce monopolies who raise prices on the food we need to survive. Today's "inflation" isn't the result of sending out too much covid relief to ordinary people - it's the result of monopolies:

https://pluralistic.net/2022/02/02/its-the-economy-stupid/#overinflated

And the lack of capacity:

https://pluralistic.net/2022/06/01/factories-to-condos-pipeline/#stuff-not-money

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👲🏿 This day in history

#20yrsago Developing world kept down by intellectual property https://www.nytimes.com/2002/10/14/business/new-economy-intellectual-property-debate-takes-page-19th-century-america.html

#20yrsago Open spectrum explained — REALLY well https://web.archive.org/web/20021029232157/www.newamerica.net/Download_Docs/pdfs/Pub_File_1001_1.PDF

#15yrsago Logo’s 40th birthday https://www.wired.com/2007/10/forward-40-wher/

#15yrsago Law-firm: copyright prohibits “view source” on our page https://pubcit.typepad.com/clpblog/2007/10/you-hereby-agre.html

#10yrsago Universal Computer Users https://contemporary-home-computing.org/turing-complete-user/

#10yrsago Gary McKinnon on the decision not to extradite him to the USA https://www.theguardian.com/world/2012/oct/17/gary-mckinnon-feels-set-free

#5yrsago Stephen Fry’s lecture on a hopeful, cautious, excited vision of a better technological world https://www.youtube.com/watch?v=24F6C1KfbjM

#5yrsago WPA2 was kracked because it was based on a closed standard that you needed to pay to read https://www.wired.com/story/krack-wi-fi-meltdown-open-standards/

#5yrsago Bake: fizzing Alien facehugger pudding-cups https://web.archive.org/web/20171009162754/https://eatthedead.com/2017/10/05/halloween-recipe-alien-facehugger-pudding-cups/

#5yrsago Panama Papers journalist assassinated by car bomb in Malta https://www.mirror.co.uk/news/world-news/car-bomb-kills-journalist-behind-11352821

#5yrsago Listen up: you really owe it to yourself to read 15 Vlad Taltos novels, seriously https://memex.craphound.com/2017/10/17/listen-up-you-really-owe-it-to-yourself-to-read-15-vlad-taltos-novels-seriously/

#5yrsago Jeremy Corbyn: damned right we’re a threat to the economic order https://www.theguardian.com/politics/2017/oct/13/corbyn-hammond-right-to-say-labour-threatens-whole-economic-system

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👲🏿 Colophon

Currently writing:

* The Bezzle, a Martin Hench noir thriller novel about the prison-tech industry. Friday's progress: 508 words (50249 words total)

* The Internet Con: How to Seize the Means of Computation, a nonfiction book about interoperability for Verso. Friday's progress: 521 words (46644 words total)

* Picks and Shovels, a Martin Hench noir thriller about the heroic era of the PC. (92849 words total) - ON PAUSE

* A Little Brother short story about DIY insulin PLANNING

* Vigilant, Little Brother short story about remote invigilation. FIRST DRAFT COMPLETE, WAITING FOR EXPERT REVIEW

* Moral Hazard, a short story for MIT Tech Review's 12 Tomorrows. FIRST DRAFT COMPLETE, ACCEPTED FOR PUBLICATION

* Spill, a Little Brother short story about pipeline protests. FINAL DRAFT COMPLETE

* A post-GND utopian novel, "The Lost Cause."  FINISHED

* A cyberpunk noir thriller novel, "Red Team Blues."  FINISHED

Currently reading: Analogia by George Dyson.

Latest podcast: Sound Money https://craphound.com/news/2022/09/11/sound-money/

Upcoming appearances:

* Copyright Evidence: Synthesis and Futures – CREATe (Glasgow), Oct 17
https://www.create.ac.uk/copyright-evidence-synthesis-and-futures/

* The Global Governance of Online Harms - McGill (Montreal), Oct 20
https://www.eventbrite.ca/e/the-global-governance-of-online-harms-tickets-424203352647

* Library Journal Day of Dialog (Zoom), Oct 20
https://www.libraryjournal.com/event/library-journal-day-of-dialog-2022-fall#program

* Chokepoint Capitalism Event, Argo Bookshop (Montreal), Oct 23
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* Surviving Apocalyptic Economics, with Douglas Rushkoff and Rebecca Giblin, Ottawa Writers Festival, Oct 24
https://writersfestival.org/events/fall-2022-in-person-events/surviving-apocalyptic-economics

* World Ethical Data Forum, Oct 26-28
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* Radical Book Fair/Lighthouse Bookshop (Edinburgh), Nov 10
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* Arthur C Clarke Award (DC), Nov 16
https://www.clarkefoundation.org/2022-awards-event/

Recent appearances:

* The Literary Life with Mitchell Kaplan (Lithub)
https://lithub.com/cory-doctorow-why-our-current-tech-monopolies-is-all-thanks-to-ronald-reagan-and-robert-bork/

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Latest books:

* "Chokepoint Capitalism: How to Beat Big Tech, Tame Big Content, and Get Artists Paid, with Rebecca Giblin", on how to unrig the markets for creative labor, Beacon Press/Scribe 2022 https://chokepointcapitalism.com

* "Attack Surface": The third Little Brother novel, a standalone technothriller for adults. The *Washington Post* called it "a political cyberthriller, vigorous, bold and savvy about the limits of revolution and resistance." Order signed, personalized copies from Dark Delicacies https://www.darkdel.com/store/p1840/Available_Now%3A_Attack_Surface.html

* "How to Destroy Surveillance Capitalism": an anti-monopoly pamphlet analyzing the true harms of surveillance capitalism and proposing a solution. https://onezero.medium.com/how-to-destroy-surveillance-capitalism-8135e6744d59 (print edition: https://bookshop.org/books/how-to-destroy-surveillance-capitalism/9781736205907) (signed copies: https://www.darkdel.com/store/p2024/Available_Now%3A__How_to_Destroy_Surveillance_Capitalism.html)

* "Little Brother/Homeland": A reissue omnibus edition with a new introduction by Edward Snowden: https://us.macmillan.com/books/9781250774583; personalized/signed copies here: https://www.darkdel.com/store/p1750/July%3A__Little_Brother_%26_Homeland.html

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* Red Team Blues: "A grabby, compulsive thriller that will leave you knowing more about how the world works than you did before." Tor Books, April 2023

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