Who Slaughters the Competition?

2.5 years after violent protests, a look at what’s actually threatening French cattle farmers

I’m still in the throes of a deadline - so it’s another short one - but I really wanted to share two great things with you.

1. The video I mentioned in my post last week that was produced as part of a three-year research project on the challenges - and defense - of national-level public health policies regulating the food, tobacco and alcohol industries at the World Trade Organization (WTO). Make sure to watch it.

2. HOT OFF THE PRESS: An investigation that has just been published, led by the indefatigable Margot Gibbs, together with Charles Boutaud - both my colleagues at Lighthouse Reports - and Raphaëlle Aubert at Le Monde.

Photo by me.

In early 2024, many capitals in Europe were rocked by large-scale farmer protests, some of which turned quite violent.

Farmers were angry at a lot of things, including the EU-Mercosur trade deal, low incomes, excessive bureaucracy, and what they saw as the unjust distribution of subsidies.

Yet one of the few tangible outcomes has been the dismantling of green policies. I’ve written previously about the curious case of how government responses zeroed in on environmental issues.

Nolite te bastardes carborundorum

Message Not Received

We’re now two and a half years and multiple heat waves later (the one just a few weeks ago alone killed more than 10,000 people). As far as I’m aware, the other issues driving the protests have not really been addressed.

Please prove me wrong, Brussels insiders. I would dearly like to be wrong.

For a while, we’ve been working to understand some of the underlying issues that have put many European farmers in financial hardship, and whether they are, as policymakers were quick to point out then, truly caused by requirements to protect nature and reduce harmful chemical use.

Well, Lighthouse Reports and Le Monde have just published a groundbreaking investigation that reveals how French cattle farmers are reeling from an increasingly concentrated market.

Publicly-owned slaughterhouses, mostly of modest size, have disappeared. Many have been replaced by a Breton industrial group - the Bigard Group - that now reigns supreme in the French beef sector.

These days, “more than two-thirds of cattle farms rely on a very small number of slaughterhouses, at levels of concentration likely to affect competition”.

“For one in five farms, these levels exceed the generally accepted legal thresholds,” the Le Monde article revealed.

The Herfindahl-Hirschman Index

The HHI is a widely used measurement in which a value of more than 2,000 “indicates that a livestock farmer faces a situation that could undermine competition under European merger law”.

The team mapped the number of cattle farms in each administrative district, and using a separate dataset of slaughtering volumes, calculated the HHI and market share within different distance thresholds of each district.

What did they find?

• More than two thirds of farms are now located in what is considered a “highly concentrated market” where HHI thresholds exceed 2000 and competition is likely to be inhibited.

• And one in five farms are located in districts in which Bigard holds a “dominant position”, meaning over 50% of the market. This is a threshold generally considered unlawful in the context of French merger law.

Why is this a problem? Well, when you have so few firms dominating a market, it could lead to market abuse, reduce competitiveness, make it hard for new entrants, and also leaves us more vulnerable to shocks.

In this case, farmers in such concentrated markets become dependent on the practices and prices of the dominant firms, which are more likely to collude rather than compete on their buying price.

Many Farmers Lose, One Firm Benefits

The result of Bigard’s dominance - €5.8 billion in turnover, 60 sites, and growing revenues - is that slaughterhouses are now farther away, industrial ones generally offer fewer services, and they are able to set the terms and prices when purchasing cattle.

In a nutshell, farmers now have less choice, less bargaining power, and less money. The investigation found that in the 15 years after Bigard’s mergers, pre-subsidy losses doubled.

“Every kilometre travelled causes stress for the animals and weight loss due to dehydration, meaning less money for the farmers.”

The joint investigation highlights a divergence during the 2010s: the purchase price of cattle fell (farmers receive less) and the cost of beef rose (consumers have to pay more).

Essentially, Bigard was paying less to farmers, but those lower prices were not passed on to the consumers. On the contrary, consumer prices were rising, as confirmed by the French Price Observatory.

Meanwhile, Bigard’s profits jumped.

“Between 2004 and 2023, the group’s profits more than quadrupled, rising from 12 to 57 million euros. The company has also paid out 300 million euros in dividends to its shareholders over the last decade.”

What’s striking is that Bigard had actually not broken any competition rules. The Competition Authority or its predecessor approved the mergers, but did not systematically take into account the regional consequences, the report notes.

The article quotes Anne Witt, a professor of law at EDHEC Business School, who said the failure to consider the effects on farmers is part of a wider culture in which competition authorities have focused primarily on protecting ‘consumer welfare’ – that is, low prices – while ignoring the broader context of the value chain.

“Maintaining purchasing power is said to be “one of the reasons why competition authorities have not taken such a keen interest” in producers. “Who cares if a company leaves the market as long as consumer welfare is not affected?””

Something’s Gotta Change

While green policies were gutted supposedly to appease angry farmers, a massive slaughterhouse monopoly was quietly squeezing France’s cattle industry to the bone.

I’ve said time and again - and those way smarter and more knowledgeable than me have done so too - that competition is not merely a technical issue, and I can’t think of a more illustrative example than this investigation by my colleagues.

In Europe, we hear a lot of talk about the regeneration of the farming sector, particularly for livestock. But who wants to farm in such conditions?

We also hear a lotabout how traditional and artisanal farming in France is. But this work, alongside our previous exposé into the French farm union, shows that France and Europe are not impervious to the forces and rationales that have created massive conglomerates in the U.S. at the expense of smaller farmers and ordinary people.

Can policymakers who keep banging on about how much they care for farmers and Europe’s food sovereignty please stand up and do something?

So, what does ‘doing something’ look like? Here are a few suggestions from my colleagues:

• Tighten the thresholds: Lower the legal benchmarks that allow mega-mergers to slip through unchallenged.

• Elevate food sovereignty: Can we rethink the philosophy of antitrust regulations? Can we enshrine food sovereignty as a higher-order principle that competition law is mandated to serve?

Also, our methodology is open for all to see. I would love journalists in other countries to use it to start their own investigations.

Further reading

• How Bigard, which swallowed up Charal and its competitors, dictates slaughter rules to cattle farmers - Le Monde

• Cut to the Bone: Farmers at the mercy of the meat monopolists - Lighthouse Reports

Thin’s Pickings -

1. Inside Big Ag’s Plot to Kill The EU Green Deal - Grilled

   Former Unearthed investigative journalist Zac Boren’s new project has been hitting it out of the park.

   This time, he reveals, through internal meeting minutes, how Europe’s most powerful farming lobby, Copa-Cogeca, worked to undermine efforts to make farming more sustainable.
   Long-time readers of Thin Ink will be familiar with Copa-Cogeca. For those who are not, these previous issues should help.
   

   In the Name of the Farmers

   "(Small farmers) have a lot of things to say but no one is listening"

2. Setting the record straight: Calley Means - Food Politics

   Marion Nestle’s point-by-point rebuttal of some head-scratchingly inaccurate accusations from RFK Jr’s top food advisor and MAHA senior figure, Calley Means.

   The attempt to smear Marion is utterly baffling, and I really hope the MAHA faithful do some research before jumping on the bandwagon. Even a cursory glance would expose the inaccuracies.
   

3. Time for a break? - Food Fight Files

   Thoughtful ruminations from Stuart Gillespie, author of Food Fight and previously featured in Thin Ink, on Wildfarmed’s deal to supply Nestlé with regeneratively farmed wheat for its KitKats.
   

4. The World’s Largest Meat Company Abandons Its Climate and Deforestation Goals - Inside Climate News

   “In its recent annual sustainability report, released last week, JBS dropped its ambitious commitment to reach net-zero emissions by 2040 and omitted any mentions of its previous goal to eliminate deforestation across its supply chains in Brazil,” wrote Georgina Gustin.

   I guess at this point we shouldn’t be surprised. But we can still be disappointed, right? Thanks to Duncan for pointing me to this one.
   

5. How Might a ‘Super El Niño’ Affect Food, Forests and Water? - World Resources Institute

   Five WRI experts on what could happen if scientists’ predictions of a “Super El Niño” come true.

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