When Companies Consolidate, Customers Suffer

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For customers, the existence of different brands of the same or similar products creates choice, the strongest tool any consumer can use to ensure that her voice is heard. But what if this choice was in fact an illusion? A single company could create multiple brands that in reality are the same product with different packaging—thus profiting regardless of the customer’s choice.

With the increased consolidation of consumer products in America, customers are finding themselves with fewer true options than ever before.

A tremendous portion of all consumer brands are owned by just 10 multinational companies: Coca-Cola, Procter & Gamble, Kellogg’s, Unilever, Johnson & Johnson, Nestlé, Kraft, General Mills, Mars and PepsiCo. In a similar fashion, the entertainment industry now consists of just six conglomerates, a far cry from the 50-plus that held a stake in the industry thirty years ago.

As an example of the impact on consumers, take a product like mouthwash. A shopper may be left with a choice between the Scope and Listerine brands. Listerine costs about 70 cents more, planting the idea that it is more high-end than Scope. But regardless of the customer’s decision, the sale of either will benefit Johnson & Johnson, the manufacturer of both brands. It is unlikely that most consumers even understand the slight formulaic difference between the two products, but the presence of both creates the all-important choice. The trend exists across just about any consumer product you can imagine, from candy to deodorant and even water.

While big business continues to grow, the walls of separation between brands and companies are getting slimmer. This does not suggest that their products are not of quality, but the lack of healthy competition between brands could spell disaster for consumers who expect the highest caliber. It is up to customers to educate themselves and maintain the value of the customer’s choice.

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