Senator Elizabeth Warren (D-Mass.) is once again sounding the alarm on consolidation in the food market. Eager to follow up on her bizarre 2022 X post lambasting a merger in the highly competitive grocery store industry, the 0.09% Cherokee senator from Massachusetts announced on X that she has concerns with spice-maker McCormick’s purchase of food giant Unilever, specifically its popular mayonnaise brand Hellmann’s.
In the widely-mocked tweet, Sen. Warren gravely intoned that all of four popular food products could soon be made by the same company once the deal is completed. Previously, only three of the four products listed were under the McCormick umbrella. A successful acquisition of Unilever, which is all but certain at this point, would add Hellmann’s mayonnaise to the McCormick family, which already produces the eponymous spices and two hot sauce brands.
Imagine the horrors that could stem from such a combination of mayonnaise and spices – they might start making chipotle mayo!
Worse still, as noted by the Washington Free Beacon‘s Andrew Stiles in his weekly newsletter, one of several recipes Warren included in her Native American cookbook Pow Wow Chow requires both mayonnaise and chili sauce. While the provenance of a supposedly American Indian recipe that calls for mayonnaise is dubious, imagine the horror of having to purchase both of these ingredients from the same distributor. That is, if one is buying in bulk and not shopping at a grocery store, in which case one is unlikely to visit multiple stores on one trip anyway.
But Sen. Warren is raising a different, more urgent question paraphrasing the renowned Bikini Bottom trombonist Patrick Star: is mayonnaise an instrument of monopoly?
Sen. Warren’s allegation that this deal could raise grocery prices is a rehash of her typical economic illiteracy. Prices for consumers are set by retailers, not wholesalers. Wholesalers can in theory raise prices for retailers, but they have their own highly competitive market for retailers’ dollars. The combined McCormick-Unilever business would still compete with Kraft-Heinz, Nestlé, Conagra Brands, and dozens of smaller sauce and condiment makers. Raising wholesale prices, rather than leveraging their economy of scale to lower them and edge out their competitors, would likely lose McCormick market share rather than improve it.
Conventional grocery stores have a razor-thin profit margin of between 2 and 3 percent. Competition between grocery stores largely dictates retail prices, with wholesalers like McCormick and Unilever adjusting to market realities of what stores are able to charge without losing customers. In all likelihood, inflation and rising fuel costs imposed by bad government policy will continue raising costs for all consumers, not mergers between wholesalers.
Ultimately, the answer to the question is no, Sen. Warren, mayonnaise is not an instrument of monopoly. Horseradish is not an instrument of monopoly either.