Results tagged “conscious commitment” from PlanetGreen.org

Conscious Commitment: The Trust in Your Pantry

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Trian.jpgPart 5 of 5 in a series, "The History of Antitrust"

In the one hundred and twenty-seven years that have elapsed since the passage of the Sherman Act, our nation has experienced countless social and political changes and enforcement of this law has fluctuated with the times. The administration of Theodore Roosevelt marked the pinnacle of public awareness of the subject; after ten years of unfettered consolidation resulted in the Great Depression, uncompromising regulation of the trusts became a staple of New Deal policy; and in the prosperity of postwar America, though the public largely lost interest in the issue of antitrust, it remained a significant mainstay of our capitalist economy. However, during the social upheaval that took place in the 1960s, the goal of a truly free market lost its place in the platforms of both parties.

The Democrats adopted the vision of Lyndon Johnson's "Great Society;" though the facets of this policy dealing with civil rights, education, and environmental protection were undoubtedly beneficial, its economic framework virtually ignored the issue of monopolization and instead relied on welfare programs and public spending to achieve equality. This system effectively relieved corporations of their core social responsibilities - to provide citizens with stable employment at fair wages and quality goods at fair prices - and instead shifted those responsibilities to the taxpayer. The Republicans, meanwhile, entirely abandoned their traditional emphasis on fiscal freedom and prioritized the interests of consolidated industry above those of their constituents. In the decades that followed, the viewpoints of these factions grew increasingly entrenched and the fundamental incompatibility of the two perspectives led to our present polarization. In 2017, as Democrats call for socialistic measures such as single-payer health insurance or a $15 minimum wage and Republicans doggedly maintain the status quo of rampant oligopoly in the healthcare, national defense, agriculture, and communications industries, the breach between both sides is steadily widening - and the solution that restored prosperity in the 1930s and allowed for the economic well-being of the mid-century, that protected both citizens and legitimate enterprise from untrammeled restraint of trade, has been isolated in the center of the political spectrum.

This trend affects society at all levels - from things that only indirectly affect most Americans, such as the cost of federal projects such as the improvement of cell phone networks or the maintenance of the military, to matters that impact local communities, such as the exorbitant amount your state pays each year for school lunches or highway repairs, to your own personal range of choices every time you restock your pantry.

The story of your groceries begins with an obscure investment company, Trian Partners, incorporated in Delaware and principally conducting business in New York. This firm is headed by billionaire and Wendy's Chairman of the Board Nelson Peltz and run by a tight-knit group of individuals prominent in the grocery industry. Peltz himself, in addition to his control of Wendy's, is a director of Kraft Heinz and its spin-off group Mondelez International. Together, these companies own products such as the Nabisco line of snacks, including Oreos, Ritz crackers, Fig Newtons, Nilla wafers, Premium saltines, Wheat and Vegetable Thins, Nutter Butter, Honey Maid, Cheese Nips, and even French cookie brand LU; candies and desserts including Cadbury chocolates, Trident gum, Swedish Fish, Jet-Puffed marshmallows, Toblerone, Sour Patch Kids, Twist, Mallomars, Stride, Dentyne, Milka chocolates, and Jell-O; meat brands such as Oscar Mayer, Ball Park hot dogs, and Lunchables, as well as the popular Boca line of vegetarian alternatives; drinks such as MiO, Tang, Wyler's, Kool-Aid, Crystal Light, Country Time and Capri-Sun; Gevalia and Maxwell House coffee, as well as all Starbucks products sold in stores; condiments like Heinz ketchup, A1 sauce, Kraft salad dressings, and Miracle Whip; dairy products including Cracker Barrel, Kraft Macaroni and Cheese, Cheez Whiz, Easy Cheese, Kraft Singles, Philadelphia Cream Cheese, Velveeta, and a nearly complete monopoly on parmesan cheese; Ore-Ida fries; and Planters nuts. In addition, Mondelez board member Josh A. Frank and former Heinz CEO William R. Johnson are now partners at Trian, further cementing this group's control over the snack titan.

However, Trian's dominance does not end there. Its partners are heavily involved in other aspects of the supply chain as well - Peltz and Frank are both directors of food-service giant Sysco, and Trian also owns over two million shares of national retail store Family Dollar. In addition, they are also a major player in the soft drink industry. Their control over the Dr. Pepper Snapple Group (DPSG) has been well-documented in securities filings and acquisitions over the past decade. By the beginning of this century, products such as Royal Crown Cola, Snapple, and Stewart's Root Beer were owned by the parent company of Wendy's, of which Peltz, his son Matthew, and his son-in-law Edward Garden are all directors. These assets were sold in 2000 to Cadbury Schweppes - notably, the buyer is an important portion of the Mondelez/Kraft/Heinz conglomerate, indicating that this group may have been simply shuffling their subsidiaries rather than selling them - before the drink brands were eventually acquired by the parent company of Dr. Pepper. However, this second sale did not end Trian's interest in these products. Documents from 2008 show that 18.2 million shares in the DPSG were distributed among Peltz, Garden, several "straw" companies with names such as "Trian Partners Parallel Fund I" (the numeral in the name signifying that there are at least four of them), and two other Trian subsidiaries incorporated in the Cayman Islands. During these same years, Cadbury Schweppes also bought the entirety of the Dr. Pepper/7 Up Bottling Corp. and added it to the Kraft portfolio - though this acquisition was spun off in 2007 with Peltz' full support, there is no evidence that Trian members have significantly divested from it in the following years.

Recently, Trian has further strengthened their oligopoly of the consumer snack industry by quietly accumulating a significant stake in PepsiCo and subsequently utilizing that interest to eliminate competitors. Though PepsiCo is best known for its line of sodas, it is also the parent company of Frito-Lay, Quaker cereals, Tropicana, and Gatorade, assets that could complete Trian's virtual monopoly on the snack industry if controlled by Trian. The group's fiscal choices and personal connections vividly illustrate that a close bond was in fact forged between the companies in recent years. As of 2013, Trian had reportedly invested $1.3 billion dollars in PepsiCo, and was publicly using their role as shareholders to attempt to control the latter. Interestingly, Trian's employees are also closely connected to the soft drink titan - former PepsiCo CEO Michael D. White, who had worked there for twenty-nine years before becoming a partner at Trian, reported ownership of over two hundred thousand shares in the company after his most recent sale of PepsiCo stock. Another partner, William R. Johnson of Heinz, is a PepsiCo stockholder and a current member of the board. These influential members of the Trian ring may have influenced a 2009 agreement between PepsiCo and the Dr. Pepper Snapple Group, in which PepsiCo agreed to pay DPSG $900 million dollars for the privilege of bottling their products. Though the companies claimed that this contract would reduce the cost of soda to the consumer and be "mutually beneficial," independent company Mahaska Bottling sees the matter differently.

In a complaint filed under the Sherman Act last year, Mahaska alleges that collusion between PepsiCo, the Dr. Pepper Snapple Group, and Trian investment Family Dollar has led to price-fixing and monopolization. According to the plaintiffs, the increase in commerce experienced by PepsiCo after the DPSG deal gave them an unprecedented market share in soft drinks, and PepsiCo subsequently attempted to use this power to eradicate competition. As part of this plan, Family Dollar - of which Trian partner and Peltz' son-in-law Edward Garden was then a director - agreed last year to temporarily lower its soda prices to below bottling cost, refusing to carry any Pepsi or DPSG products until these new prices were met. The only bottlers capable of producing under those conditions happened to be directly owned by PepsiCo, and consumers' demands were supplied by them until Mahaska was driven from the market entirely. The words of the complaint concisely summarize this scheme:

"PepsiCo and PBC entered into an unlawful pricing arrangement with Family Dollar covering not only PepsiCo products but also DPSG products and unlawfully instructing Mahaska to discontinue all DPSG service to Family Dollar... so that they can subsequently raise prices in Mahaska's territories."

This case is still pending in the Southern District of Iowa, and is expected to go to trial at some point this year. Though at first glance, it may appear to be a relatively routine pricing dispute, even the most cursory investigation of the circumstances reveals that such concerted actions are not consistent with healthy competition - rather, the Mahaska dispute is one of the few visible instances of a decades-long, industry-wide attempt to corner the American supermarket.

Read the fourth installment of this series, "The New Deal and a New Start"

Conscious Commitment: Monsanto Has Spoken

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Over the past months I have told you about my campaign to end Monsanto Technologies' unlawful monopoly on genetically modified agricultural seed, largely attained through its fraud as to the ambit of its United States patents. This objective has led me, at various stages, to enlightening calls with family farmers, conversations with former plaintiffs, consultations with First Amendment experts, correspondence with journalists, and complaints directed to federal and local antitrust and consumer protection officials. The authorities' response has varied widely - some states, like Missouri (where Monsanto is incorporated), disclaimed any jurisdiction to act over the matter - but Arkansas has acted to protect its growers from this deception, and recently referred my complaint to Monsanto.

Their response:

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I'll share my response - and the actual law of this controversy - with you shortly.

Conscious Commitment: Help Us "Save Our Seeds"

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Recently, we told you about the unlawful practices of Monsanto Technologies, which develops and conditionally sells GMO seeds using a standardized, unconscionable contract which prohibits farmers from saving and replanting the seed. Acting under color of this misrepresentation, they have maliciously prosecuted dozens of law-abiding growers, stifled the academic freedom to research their seeds, and obtained the Supreme Court's stamp of approval on a manifest fraud.

I have since launched an initiative to bring Monsanto and their executives to justice and hold them accountable for their falsehoods. I need your help to do this, however. Recognizing that, I created a We the People petition exhorting the Department of Justice to take action against these corporate criminals:

"We the People ask our DOJ to take antitrust action against Monsanto Technologies and preserve the rights of American farmers and consumers. Monsanto has created an unconscionable, illegal contract in which farmers agree not to save seed, ignoring the clear words of patent laws and the PVPA.

Restricting access to new technology in no way furthers agribusiness' supposed goal of feeding the world; informing citizens as to the contents of the laws in no way jeopardizes any legal purpose. Our officials serve those who shape law with soft money instead of firm stands, and scientific and economic freedom is trampled as a result. We are merely asking the enforcers of our laws to take a stand for us, to recognize the flagrant violations of the Sherman Act Monsanto and like companies commit daily."

Please sign our petition today - help me live up to this "Conscious Commitment" to protect economic freedom in this country.

Conscious Commitment: Inmar, Inc.

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coupon.jpgYour wallet speaks for itself. Evidence of Inmar, Inc.'s dominance in the coupon industry is everywhere. Blazoned under the colorful trademarks of everything from breakfast cereal to batteries; stacked beneath the flashing lights of that dispenser on the grocery store aisle shelf; inserted in the newspaper curled up in that mailbox; folded and crumpled in that disorganized folder; printed on glossy vibrant paper and plastered onto the boxes composing that supermarket display.

Just last April, Inmar released a statement announcing that it had taken over coupon processing services for Procter & Gamble brands. This development cements the existing diarchy Inmar and its supposed competitor but actual collaborator, Valassis Communications, enjoy over this industry. In the statement, Inmar asserts that P&G formerly handled its own coupons, but this has not always been the case. A 2006 10-K form Valassis filed with the SEC states that P&G accounted for over 10% of that company's income the previous year, indicating that P&G has merely shuttled its business between the two corporations instead of comprising a third major player in the coupon-clearing market.

In the same 10-K form, Valassis names Inmar as one of its main competitors, but this claim is plainly refuted by the business relations they openly sustain. In its capacity as the owner of RedPlum, a mailing distributing coupons held by various companies directly to consumers, Valassis openly and actively aids Inmar in disseminating its coupons. Clearly this is not the aggressive competition one would expect from two companies which jointly "control approximately ninety-five percent (95%) of the total vendor coupon redemptions" (Compl. §16, 15-4434 (JLL), Dist. NJ (1015)).

The pattern of monopolization does not stop there, however. Though Inmar's coupon redemption and product return business is its most visible enterprise to consumers, it is certainly not its only venture. It is actually the predominant figure in the pharmaceutical returns market as well, and our research into its practices indicates that the leverage it enjoys as a result of its prominence could have far-reaching consequences for citizens compelled to trust it with their health.

It was a minor incident, and never should have been the major controversy it turned into. In November of 2008, Johnson & Johnson and its affiliate, McNeil Consumer Healthcare, noticed that several lots of their product Motrin failed to satisfy their manufacturing standards and were defective. This news immediately followed a string of recalls of other popular Johnson & Johnson products, including widely used cold and allergy medicines. Presumably to avoid the negative publicity that would result from expanding the recall to include the faulty Motrin, Johnson & Johnson decided to keep their findings secret. To do this, they formed a plan to send operatives into retail stores posing as customers, who would then buy back as much Motrin as possible. However, consumers who had already bought the defective Motrin would not be notified in any way of the problems.

Johnson & Johnson then hired Inmar to carry out this clandestine design, rejecting bids from several companies to handle the recall openly. Inmar promptly mobilized its employees and contractors, instructing them:

"You should simply 'act' like a regular customer while making these purchases. THERE MUST BE NO MENTION OF THIS BEING A RECALL OF THE PRODUCT! If asked, simply state that your employer is checking the distribution chain of this product and needs to have some of it purchased for the project."

Approximately five thousand convenience stores were searched in this fashion. The first two hundred and fifty stores yielded 595 vials, but the actual number of defective Motrin remaining on the market was dramatically higher - in one state alone, seven hundred and eighty-seven packages remained missing even after Inmar's feeble attempts to rectify the situation.

The recall was finally made public in February of 2010, over a year after Johnson & Johnson became aware of the problem and over ten months after Inmar became involved in the cover-up. Congressional hearings, civil lawsuits and criminal prosecutions ensued, but though Johnson & Johnson was made to take responsibility for its misconduct, Inmar escaped any meaningful penalty.

Now, five years after the federal firestorm subsided, Inmar is still in the pharmaceutical returns business, a job mostly composed of disposing waste, juggling returned or expired merchandise, and managing recalls. On its website, it proudly boasts that it provides these services to twenty-four thousand retail pharmacies (out of approximately twenty-eight thousand in the country), giving it control over 86% of the market. As Inmar has proven in the past, this anticompetitive situation could prove injurious to consumers which may never have heard its name, but still entrust it with their well-being every time they purchase the simplest of medications.

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