Washington, DC — In response to the Labor Department’s latest Consumer Price Index (CPI) report, a new analysis from Accountable.US revealed three of the largest U.S. “food at home” companies—including Mondelez, General Mills, and Kraft Heinz—continue to pad their profits with aggressive price hikes, despite a combined 51% increase in year-over-year net earnings during their first fiscal quarters of the 2023 calendar year, easing inflation, and worsening food insecurity across the country. Meanwhile, these companies spent over $1.3 billion on shareholder dividends. The findings are the most recent evidence that while inflation is slowing, the Fed’s single-minded policy of repeated interest rate hikes are doing little to contain the primary driver of rising costs — corporate greed.
Over the course of 2022, “food at home” prices rose by nearly 12% year over year. Fast-forward to May 2023, and food at home has continued to stay stubbornly high, driven by cereal and bakery products climbing by nearly 1% in March 2023. This has placed increased pressure on American consumers, who are forced to skip meals to cut costs. Still, Chief Economist for UBS Wealth Management Paul Donovan told The Wall Street Journal companies were “confident that they can convince consumers that it isn’t their fault,” using bottlenecks and high energy costs as an excuse for hiking prices. This disparity is the latest materialization of a continued trend of corporate greed and profiteering from the big U.S. food industry.
For instance, Accountable.US found Mondelez—who owns popular brands such as Belvita and Chips Ahoy!—saw a shocking 142% increase in quarterly earnings after announcing price hikes, which empowered it to spend $928 million in dividends and stock buybacks for their wealthiest shareholders.
Big food’s staggering increase in earnings shows they did not need to raise prices so high on consumers but did so anyway to maximize record profits. It’s shameful that Americans are left food insecure and have to skip meals while corporations and their wealthy shareholders enjoy the spoils of supersized profits under unjustified price hikes. It’s clear that the food industry will not hold itself accountable. It’s time Congress do more to rein in corporate greed, one of the main factors currently driving up costs for families.”
Liz Zelnick, Accountable.US’ Director Of Economic Security And Corporate Power.
The CPI report comes as Federal Reserve Chair Jerome Powell raised interest rates for the 10th time since March 2022, despite a chorus of warnings from economists, union leaders, and political figures that staying this course could cost jobs or even lead to a recession.