A Food Fight is A-Brewing: U.S. Senator Cory Booker is Bringing Attention to Antitrust Legal Issues in the Food Market

Friday, July 26th, 2019

By Koral C. Fritz

For over a hundred years, the Sherman Antitrust Act (the “Act”) has controlled the nation’s business practices. The Act namely prohibits anticompetitive agreements and unilateral conduct that monopolizes a particular market. The Act aims to preserve a competitive marketplace so that consumers do not suffer abuse at the hand of companies. Despite this law, some argue there are not enough rules to keep companies in check – especially when it comes to food companies. Therefore, last year, on September 13, 2018, Senator Booker of New Jersey introduced H.R. 6800 (the “Bill”) known as the Food and Agribusiness Merger Moratorium and Antitrust Review Act. Just this week, the Senator has announced his intentions to reintroduce the Bill.

Whether you operate a small family farm, contract-grow facility, a mid-sized food company looking to be acquired by a larger company, or a dominate food company, you have a stake in this legislation.

The Bill seeks to right a ship the Senator believes is completely unbalanced. The Senator authored a perspectives article posted by CNN Business on July 25, 2019 that explains that only four companies control about 90% of the global grain market with only three companies controlling about 60% of the world’s commodity crops. This concentration of power, the Senator believes, is wreaking havoc on independent family farms and forcing many farmers into contract growing agreements with vertically integrated multinational corporations.

The Senator’s article indicates that the Bill “targets large agribusiness, food and beverage manufacturing, and grocery retail mergers and acquisitions” and would “halt the largest, most consequential acquisitions and mergers in the food and agriculture sector.” The goal is to give Congress an opportunity to update antitrust law in a way that will protect farmers, workers, consumers, and rural communities. The Bill would put at least an eighteen-month moratorium on mergers and acquisition between dealers, processors, commission merchants, agricultural input suppliers, brokers, operators of warehouses of agricultural commodities and retailers with annual net sales or total assets of more than $160,000,000.

Additionally, the Bill calls for the creation of a twelve-member commission to spend a year examining the nature, extent, effects, and impacts of concentration of the food and agricultural sector. After a year of research, the commission would need to present its finding and recommendations to the President and Congress.

Contact our office at 616-392-4100 if you have any question about your food or agricultural business.

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Image: Merger by Nick Youngson CC BY-SA 3.0 Alpha Stock Images

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