Inflation? It’s the oligarchs…

Four corporations control meat packing and distribution in North America. They are Cargill Inc., JBS ULC, Tyson Food Inc. and National Beef Packing Co LLC. They have all been named in a class action suit brought before Quebec’s Superior Court, alleging that the 4 colluded to drive up the price of meat.

 

Innocent until proven guilty, yadda yadda, sure. We know they did it. It is done all the time. We know the bread industry, led by the Weston family and Loblaws, stole from Canadian families for years through price fixing. When the price of gas mysteriously rises overnight, it goes up the same at all the brands, like magic.

 

Inflation is presented to us like a mystical presence, just the “invisible hand” of free-market capitalism periodically giving us all the middle finger. And we’re told inflation hurts us all.

But does it?

 

Let’s look closer at capitalisms blood-stained butchers. (Blood-stained in more ways than one. The meat packing industryset the standard for cold-blooded indifference during the pandemic. Even before the pandemic, it was one of the most dangerous industries under capitalism.)

 

Cargill showed over $5 billion in net income in 2021, the biggest profit in its 158 year history.

 

Brazilian-based JBS raked in $16.8 billion in profit in 2021 – also a new record.

 

Tyson got off to a slow start in 2021; it only booked a $467 million profit in the first quarter, but it finished with a bang, with $1.12 billion profit in the final 3 months.

 

National Beef, and its Brazilian parent company Marfrig, saw profits miraculously double in the 3rd quarter of 2021.

 

Overall, profits in meat packing rose by 120% collectively, such an egregious profiteering that even the Biden White House economists started pointing fingers.

 

The butchers complained and said price increases were necessary to offset rising energy, transportation and livestock costs. They cited supply-chain disruptions due to COVID. But investigations showed that while consumer costs were going up, payments to farmers were actually going down. And price increases (and profit rates) far exceeded production cost increases.

 

Lawsuits against food producing giants are becoming run-of-the-mill. In February, JBS paid $52.5 million to settle a price fixing lawsuit in the US. In 2021 Tyson paid $221.5 million to put an end to a price fixing investigation.

 

Penalties in the millions are just the cost of doing business when there are billions to be made. And why not just pass the cost of periodic penalties back to consumers? The butchers are raising prices because they can, because consumers have no recourse, and they shrug and say “That’s inflation for you.”

 

System-wide

 

The food processing industry opens a window into a massive round of profit gouging that is taking place across the economy.

 

I noticed a curious TV ad from Esso. It showed a happy man filling up his tank, while a marching band happens by. He’s so happy because his gas purchase gets him reward points to use at Loblaws grocery stores, so a peculiar example of corporate cross-pollination. The tag line was: “Every trip to the pumps is a celebration. At least we think so.”

 

For most Canadians a trip to the pump is a nightmare. Using the pretext of supply disruptions caused by Russia’s invasion of Ukraine, gas companies jacked up prices to record levels. In one case prices rose 15 cents per litre overnight.

 

Time to call bullshit. In 2019 Canada imported just 3% of its crude supply from Russian suppliers. In 2020 that number was 0. Sure demand was down during the first stages of COVID disruption, but even with the recovery, almost no Russian oil comes to Canada. 

 

So why is the price skyrocketing? Corporations jack up prices because they can. Consumers grumble but have no recourse. There is a small uptick in public transit use and bicycle sales, but for many workers there is no option. (It is noteworthy that Ottawa’s OCTranspo decided now would be a good time to hike transit fares.)

 

No wonder O&G corporations are making big bank.

 

Imperial Oil scored $2.5 billion in net revenue for 2021, even after using some of their revenue to offset 2020 losses. Shell Oil saw its 2021 profits quadruple, raking in about $6.5 billion in just the last 3 months. Enbridge banked $11.5 billion in 4th quarter revenue, up almost a billion from the previous 3 month period. Petro Canada’s 4th quarter profits quadrupled.

 

Across the board, fossil fuel corporations are posting record profits. That this happened just as “inflation” was driving prices to record highs is surely coincidental.

 

You can bet that the gang of oiligarchs that run the industry are not exactly feeling the pinch of inflation. B.W. Corson, Chairman, President and CEO of Imperial Oil took home $4.48 Million last year. Shell boss man Ben van Beurden rose to $8.2 Million, in part to compensate him for taking a pay cut in 2020. 

 

It should be noted that these figures only refer to base salary, and exclude other forms of compensation. So it is that Canada’s highest paid energy CEO – Encana’s Doug Suttles – had a base salary of a mere $1.37 million, but with stock options and bonuses added in his total compensation was $17.6 million for 2021.

 

No wonder they think that every trip to the pump is cause for celebration.

 

We can do this exercise for every sector of the economy: housing, banking, pharmaceuticals, food distribution, telecommunications, and so on. The picture is the same. Across the board, corporations are posting record profits, and the oligarchs at the top of the pyramid are getting record compensation. The world’s 2,365 billionaires increased their wealth by $4 trillion during the pandemic. 

 

That money didn’t appear by magic, it came from your pocket, it came from all of us: from our rising prices, from our stagnant wages and whittled down pensions, and from our privatized public services.

 

The most obscene transfer of wealth in history, from the majority to the hands of a cabal of oligarchs, will continue as long as they think they can get away with it.