Economy Lindsay Owens

Corporations Are Shamelessly Using Inflation as a Cover

Corporations are using “inflation” as a cover to hike prices and record record profits. Here's the proof.
[Federal Register / CC BY-NC 2.0]

By Lindsay Owens | OtherWords

If you’ve been slammed lately by higher prices on everything from groceries to rental cars and gas prices, you’re probably wondering what on earth is behind these skyrocketing costs.

Corporations are quick to blame this new reality on the pandemic, but another major culprit is hiding in plain sight: their own profiteering.

Four times a year, corporations are required by law to update their investors on how they’re doing in terms of sales and profits. These are called “earnings reports,” and the companies will usually hold calls with the investors to walk them through the latest report.

My organization, Groundwork Collaborative, recently got our hands on the transcripts from hundreds of these earnings calls. And you won’t believe what CEOs are boasting about.

Knowing that the current inflation frenzy is a convenient scapegoat, these companies are charging customers even more to pad their profit margins. They are just admitting it — they’re openly bragging to investors about how well it’s working.

“I think we’ve done a great job with our pricing,” boasted the CFO of Hormel, a maker of popular grocery brands. “I think it’s been very effective.” As prices went up, the company improved its operating income by 19 percent in the first quarter of 2022 compared to 2021.

Constellation Brands, the parent company of popular beers Modelo and Corona, is also engaging in bald-faced profiteering. On its January call, Constellation’s CFO admitted that its consumer base “skews a bit more Hispanic” and the company wants to “take as much as [we] can” from them.

And now, the conflict in Ukraine is providing yet another opportunity for oil and gas companies to pad their bottom lines. “It’s tragic what’s going on in Eastern Europe,” said one oil executive in late February. “But if anything, these high prices, the volatility, drive even more energy security and long-term contracting.”

This pandemic profiteering is taking a massive toll on consumers, workers, and small businesses.

Low-income Americans are pinching pennies to feed their families and pay their bills. And while mega-companies can use their market power to raise prices and generate record profits, small businesses and independent retailers are struggling to keep their doors open.

The appalling price gouging and monopolistic behavior we’re monitoring comes on top of decades of disinvestment in our workers and supply chain, excessive corporate power, and financial markets maximizing short-term profits. This broken system left us wholly unprepared to accommodate increases in demand.

But make no mistake: next time you experience sticker shock in the checkout line, it’s a safe bet that corporate executives and shareholders are reaping the rewards.

People are catching on: A new poll from Data for Progress and Groundwork finds that 63 percent of voters believe that “large corporations are taking advantage of the pandemic to raise prices unfairly on consumers and increase profits.”

Policy makers are taking notice, too. The New York Attorney General’s office just announced new price gouging rules, paving the way for other states to follow suit.

And days after President Biden promised action on pandemic price gouging, congressional oversight panels opened investigations into the three major ocean shipping alliances. These outfits control about 80 percent of seaborne cargo and have seen their profits increase seven-fold from the previous year.

Finally, a recently-introduced bill, the COVID-19 Price Gouging Prevention Act, would help the Federal Trade Commission and State Attorneys General protect people across the country from pandemic profiteering.

Without competition and robust regulation to keep them in check, big corporations have gotten away with using the pandemic to push up prices and fatten their profit margins — and if they aren’t reined in, high prices could be here to stay.

Lindsay Owens

Lindsay Owens

Lindsay Owens, PhD, is the Executive Director of Groundwork Collaborative. This op-ed was distributed by OtherWords.org

21 comments

  1. “Hormel” -isn’t that a meat company?

    One thing everyone can do right now, TODAY is to Stop Eating Meat.
    Meat is not good for our Health, our Environment, or the poor Animals.

    This does not have to be a big deal. Eat veggie burgers, veggie chili and veggie pizza.
    Get a crock pot and make veggie soup.
    Get a bread machine and make your own fresh bread.
    Just dump in the ingredients, and push Start. It turns itself off when done.

    Put peanut butter on your toasted bread and with an orange and some hot peppermint tea -you have breakfast. Anyone can grow peppermint. Put some in a pot by your window.

    We don’t have to buy all this Junk just because commercials make it sound like Necessities.

    Would not hurt to cut back on the Beer too….

    1. No thank you. I like meat and meat likes me. Perhaps you could keep your religion to yourself?

      1. Dead animals like you?
        I doubt it.
        And meat does not like you.
        It is not healthy for your body.

      2. People like to trade IOU’s for good stuff thinking they’ve done a good thing, not knowing that there’s a self inflicted seeding in the transactions which contribute to self destruction.

  2. Inflation is a monetary problem at its root, regardless of how it ripples. Strike the root and there is no way to strike that root if, as consumers, we continue to be “debt dealers” with our habitual use of IOU’s which we also refer to as legal tender.

  3. I have for the last ten years been supporting local business and farms because I believe the corporations are, whether they admit it or not, hostile to the natural world and the life in it. I suspect that people who get high on power get high on death and suffering when they are not in that group. They are above life in their own minds and the more suffering their policies cause the more powerful they feel.
    We are ruled by the Pychopath class who long dismissed their human vulnerability to rise to what they feel is a godlike class – who rule but do not suffer pain. No guilt, no sadness, as it is easy for these feelings to transform into an alienating rage.
    I call this species Anthro-Hyenas. Should I just dismiss them or try and reach them?

    1. You are insulting hyenas. Only humans seem to be capable of great harm and evil. I think it does predator species great harm to use their names as insults. Just call them Greedy Sociopaths.
      And I too support local businesses and farms.

  4. Yes, we still have sur4vival-of-the-fittest capitalism, now taking down another batch of middle classers, to become part of those masses that liberals have disregarded for years.

  5. Better catch up on the cover stories, or lies, if you’re still falling for the sick farce of the scamdemic. The pandemic (that never has existed) was planned as a global coup under cover of covid-19(84) to avert any repeat, on a much more threatening scale for our masters, of the 2008 collapse leading to worldwide revolt among the 99% against the 1% who brought it on, and profited from it then.

    It was preceded by Event 201, which prior to the live exercise of 2020 was the final ‘pandemic preparedness’ exercise of psyop rehearsals routinely held over the past twenty years since the 9/11 coup, and its failed false flag of anthrax attacks to initiate a complementary war of bioterror; simulations for a further coup on the part of transnational capitalist interests represented at the planning tables, including members of the military-intelligence complex, especially the CIA, who specialize in regime change.

    But just as if not more important was the earlier annual meeting in 2019 of central bankers and financial capital in Jackson Hole, Wyoming. Already apparent to them was the imminent, inevitable collapse of the economy from their reckless rule of neoliberal debt bondage, much worse than anything preceding, including the 1930s great depression and the revolutionary shock waves it sent across the world (averted then by corporate state and fascist realignment of imperialism and another world war to redirect restless working class masses back into their subjugated roles as cannon fodder).

    Rapidly rising inflation, largely the result not of ‘pandemic’ but of the deliberate lockdown destruction of both local and global trade under cover of public health state of emergency (medical martial law), is among the continuing means of carrying forward the coup to radically restructure national economies beyond the bankrupt model of neoliberalism by instituting a totalitarian technocracy and neofeudal system of digital dictatorship over human labor, from automation and robotics replacing most remaining industrial and service workers, to UBI and social credit scores for disciplining and controlling those reduced to extreme austerity from the fallout, and more. As for the unproductive useless eaters whose numbers will be exponentially enlarged by the continued shocks of this disaster capitalism, various forms of genocide are already in effect, from starvation and suicide to kill shots administered by the neonazi system of sick care under the Pharmafia.

    Stop following the science of social engineering led above all by useful idiots of progressive professional classes who still don’t have a clue as to the coup and worldwide class war now underway, or who actively collaborate with its relentless Orwellian lies. The war in Ukraine, both distraction from rising resistance to the plandemic and emerging horrors of ‘vaccination’ and destruction of the old abnormal’s international order under US hegemony in favor of the new abnormal’s multipolar model of Oceania, Eurasia, and Eastasia, will but further our descent into inflationary austerity and mass murder as supply chains are choked further, and set up scenarios for planned ‘cyberpandemics’ to coerce us into digital IDs, passports, and such security state measures as further profit and empower the oligarchs.

    Connect the dots of a plandemic operating along parallel tracks that ruling psychopaths and their respective controlling institutions, monetary, military, medical, and more, try to keep separate and disconnected via mind control means of media and psychological warfare. Refuse to play a part any longer in the political theater of governmental fronts for these monsters of mankind, and (re)build the necessary infrastructure of resistance, including autonomous social realtions independent of the centralized, hierarchical control that now threatens our humanity in do-or-die terms. This may be our last chance to survive with any sense of a future for our species.

    1. That was quite the paranoid ramble. Wouldn’t it be weird to realize that people just suck and there is no vast plan to make us suffer, we just do it to ourselves?

      1. LOL … we must really dislike each other evidenced by the fact that what we tend to distribute to each other when we trade is IOU’s. Why ?

  6. In the Empire of Lies everything is corrupt and a lie. More often then not covering up another corruption and another lie. Up is down and day is night. Corporations are the perfect psychopaths, if you accept the premise of the corporates that corporations are people. Legally they are people so I stand by my diagnosis, the perfect psychopaths. In their unlimited greed for more they ultimately corrupt everything and everyone they touch. Perhaps most remarkably without most people ever even realizing it.

    That is dystopian as hell.

  7. Pricing well is as much about anticipating costs passed onto the corporation for raw materials, shipping, energy etc . as to the consumer. Not pricing well (making less) means less capacity to pay workers in an inflationary environment and less ability to purchase capital equipment etc. Restraint on the consumer end has implications.

    1. The biggest cost factor is debt, rising debt that is a cost to all, which we call price inflation. The root of the problem lies in credit creation. We have the capacity to produce massive wealth and God knows we can consume. The inefficacy only lies in the kind of “grease” that we use between the gears or supply and demand , as to how we TRANSACT. It’s an easy problem to distill.

      The current monetary model is dysfunctional, not because it’s flawed but because it’s incomplete and will remain that way unto debt-free currency is added into circulation by the free market. Balance and symbiosis can only ensue, thereafter, by way of that process that leads to debt-free consumer driven trades.

      Can you imagine trying to ride a bicycle somewhere where the design of the bicycle is for two wheels but only one of the two wheels is assembled to the frame ? Tough go, isn’t it ? That’s what we have at the moment.

      What to do ? Scrap the whole thing of simply add the second wheel ?

  8. Time to start a war on Corporations and end their dominion once and for all.

    1. It’s not a war on corporations that we need. It’s a war on the conditions that are applied to debt-dealing habits that we stay stuck to because of our habitual use and distribution of inflationary IOU’s.

      What’s in your wallet ? Debt, I’ll wager, meaning fiat currency. Start there.

      Understanding the very first thing about money is understanding how it was created and whether it’s debt based or debt-free. Both work together very well in symbiosis.

  9. So much fact here. Americans always seem to think inflation some phenomenal economic spell that is cast, but it’s really just capitalism being it’s genocidal, maniacal, disgusting self.

  10. Weird she brings up those thugs of the beer variety — “Constellation Brands, the parent company of popular beers Modelo and Corona, is also engaging in bald-faced profiteering. On its January call, Constellation’s CFO admitted that its consumer base “skews a bit more Hispanic” and the company wants to “take as much as [we] can” from them.”

    Amazing that that’s where she goes, when . . . .Americans’ taste for Mexican beer sucking up water supply, mayor says. A brewery satisfying Americans’ thirst for Mexican beers such as Corona is sucking so much water from wells in an arid region near the US border that it has left one municipality bone dry, according to a local mayor.

    These companies are criminals at the most base level. You think the website, Killer Coke [ http://killercoke.org/ ] is some funny thing?

    Oh, it’s the Wall Street shuffle, making huge “gains” by trading wheat, milk, commodities that feed the world. Now, if that system is allowed to continue, the story she writes is well small papas, potatoes.

    Here, just the beer and the destruction of people — I am sure the beautiful people will not boycott these evil booze dealers like Heineken,

    Quoting — https://towardfreedom.org/story/archives/americas/beer-transnationals-are-sucking-mexico-dry/

    Mexico is the biggest beer exporter globally, but it barely has enough water for its residents and farmers. Experiencing long-lasting droughts, the country, which is half desert, has become a cheap place for transnationals to consume its remaining water, then send the products and profits to wealthier regions.

    In 2018, Mexico exported almost 40 million hectoliters of water, with 80% of that going to the US. Mexico’s beer production is monopolized by two transnational companies: AB InBev, which acquired Grupo Modelo in 2013, and Heineken, which acquired Cerveceria Cuauhtemoc Moctezuma in 2010. Between them, the companies own 97.5% of the domestic consumption market. The Tecate brand, owned by Heineken, is one of the fastest-rising beer brands in the US, and Corona Extra, owned by AB InBev, is in the global top 10.

    Heineken uses Mexico because of how profitable it is. “The country has a young population, natural and human resources, and macro-economic stability,” Dolf Van Den Brink, president of Heineken Mexico, said. The company built its seventh brewery in Northern Mexico last year, choosing the location because it was close to the US and they could easily export Tecate and Dos Equis brands to US consumers.

    +–+

    United Fruit Company, anyone? Pablo Neruda:

    The United Fruit Company

    When the trumpet sounded, it was
    all prepared on the earth,
    the Jehovah parcelled out the earth
    to Coca Cola, Inc., Anaconda,
    Ford Motors, and other entities:
    The Fruit Company, Inc.
    reserved for itself the most succulent,
    the central coast of my own land,
    the delicate waist of America.
    It rechristened its territories
    as the ’Banana Republics’
    and over the sleeping dead,
    over the restless heroes
    who brought about the greatness, the liberty and the flags,
    it established the comic opera:
    abolished the independencies,
    presented crowns of Caesar,
    unsheathed envy, attracted
    the dictatorship of the flies,
    Trujillo flies, Tacho flies,
    Carias flies, Martinez flies,
    Ubico flies, damp flies
    of modest blood and marmalade,
    drunken flies who zoom
    over the ordinary graves,
    circus flies, wise flies
    well trained in tyranny.

    Among the blood-thirsty flies
    the Fruit Company lands its ships,
    taking off the coffee and the fruit;
    the treasure of our submerged
    territories flow as though
    on plates into the ships.

    Meanwhile Indians are falling
    into the sugared chasms
    of the harbours, wrapped
    for burials in the mist of the dawn:
    a body rolls, a thing
    that has no name, a fallen cipher,
    a cluster of the dead fruit
    thrown down on the dump.

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