Then in June, reports began circulating that New Delhi will grant Amazon the right to begin delivering groceries. News of preliminary acquisition talks between Amazon and BigBasket, India’s largest online grocery, began to leak.
In the same month Amazon announced a $13.7 billion bid to buy the organic giant Whole Foods.
According to the Organic Trade Association, Americans spent $43 billion on organic foods in 2016—an increase of more than eight percent over the previous year and a trend that is expected to grow.
If this merger is allowed to go through, every food retailer will suffer. Swallowing up lifestyle services like Blue Apron for example would be easy pickings for the new grocery behemoth.
“This is horrible for competition,” the director of the New America Foundation’s Open Markets program Barry Lynn told the New Republic. “This is the crushing of competition. Amazon is monopolizing commerce in the United States.”
Industrial Food Giants Will Replace Local Farms
Bloomberg is reporting that Amazon wants to shed Whole Foods’ “Whole Paycheck” image and make it more competitive with larger retailers like Walmart. If this happens, affordable organic food could become the rule, rather than the exception—and find its way into more kitchens than ever.
However, some small farmers and manufacturers are afraid the opposite will happen. Look at Amazon’s record in other fields, such as publishing, in which it now has a 40 to 100 percent market share, depending upon the genre – and you can see why.
Once in control, Amazon began to demand advantageous shipping arrangements, fees for better search rankings and steep price concessions — which has reportedly cut into the funds publishers use to buy new manuscripts.
“Publishers have to ride Amazon’s rails to get to market, so they do whatever Amazon wants,” says Barry Lynn, director of the Open Markets program at New America. “That makes it much harder for producers to do well. When producers can’t sell at the price of their choosing, they have less money to invest in quality or in future development.”
Added Patty Lovera, of Food & Water Watch: “The publishing model should be a red flag for folks in the food industry — especially suppliers.”
Amazon will more than likely take the same approach, demanding concessions from small farmers and vendors in order to lower their consumer pricing.
With organic food margins already so low, observers say that this price pressure could force out small organic farms, leaving only the industrial giants who produce fake organic food.
Amazon’s price gouge could also encourage organic food manufacturers to source more ingredients from overseas — a practice that has diluted organic standards, according to advocates and a series of Washington Post reports in May.
“The overriding thought I have about this is the likelihood of an expansion of the prevalence of fake organic foods,” Michael J. Potter, chief executive of Michigan-based Eden Foods, an independent organic company, told The Post by email. “Skyrocketing amounts of ‘cheap imitation organic food’ from overseas has driven prices down, creating an environment that does not serve the development of our domestic organic agricultural resources.”
Controlling all of retail commerce is only the beginning in understanding what Amazon is quickly becoming.