The latest news is Kraft's planned purchase of Britain's Cadbury to create a mac-and-cheese-to-candy-bar megalith with combined worldwide sales of nearly $55 billion. It comes on the heels of Heineken's purchase of the beer operations of Mexico's Femsa to create a $25 billion mega brewer. These aren't even the dominant companies in their business. Switzerland's Nestlé is almost twice as large as Kraft. Heineken will now be about the same size as the brewing colossus built in 2008 when Belgium's InBev bought Anheuser-Busch. At the end of 2008, 10 companies accounted for two-thirds of the world's beer sales, up from 40 percent in 2002.
"Consolidation is sold by corporate gurus as rich in synergy and efficiencies that eventually trickle down to consumers. But the supposed consumer benefits are often unconvincing. Pennzoil's acquisition of Quaker State led to more expensive motor oil, Procter & Gamble's purchase of Tambrands led to more expensive tampons, and General Mills' purchase of the Chex brands led to more expensive cereal, according to one study. Despite limits imposed by antitrust regulators, the merger between Guinness and Grand Metropolitan to create the food and drink giant Diageo led to substantial increases in the price of Scotch".
In India many desi food companies owned mostly by families with traditional experience resist such temptations and do not lend themselves to buying out by competitors. The most notable buy out in India was that by Coca Cola when it entered the country after economic liberalization in early nineteen nineties capturing a substantial market in cola beverages enjoyed by the Thumsup brand of Parle. Though there is a Monopolies and Restrictive Trade Practices Commission that is supposed to be a watch dog for preventing mergers and cartelling, food industry was never a focus of investigation by this Commission so far.
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