The completion of this merger would bring the new company even closer in size to the two largest commodity traders, ADM and Cargill. The European Commission still needs to investigate this merger, which has already been approved by the shareholders of Bunge and Viterra.
The international market for food commodities has become increasingly concentrated in recent years. Since 1990, EU competition authorities have examined a total of sixty mergers and acquisitions involving the world's five largest multinationals. All were approved except for one exception.
The biggest five (ADM, Bunge, Cargill, COFCO, and the Louis Dreyfus Company) together hold a monopoly on the global market for staple foods such as grain, corn, soy, and sugar. Over the past three years, they have tripled their profits. This is revealed in a new study (Hungry for Profits) by SOMO, an Amsterdam-based private foundation that conducts research into multinational corporations.
In 2022, the profits of these five global players reportedly tripled compared to the period 2016 to 2020. According to SOMO, these 'Big Five' control between 70 and 90 percent of the world trade in commercial grains. Moreover, they have significant control over key soy export markets (Brazil, the US, Paraguay, and Argentina).
The SOMO study states that the European Commission can halt the trend toward further monopolization. According to SOMO, EU investigations could focus on pricing and the market power that a new mega-player in the food industry could exert.
The researchers from SOMO call it alarming that these companies have been able to triple their profits during times of hunger and crisis by driving up food prices.