In the Center of the Imperialist World System

German Meat Capital Profits from International Relations of Exploitation

Big German meat companies are tall in the saddle. Over the past few years, they have expanded their business, even though their domestic market is saturated and the consumption of vegetarian and vegan products is on the rise. In 2018, the meat industry generated a total turnover of 42.5 billion Euros, more than twice as much as at the turn of the millennium. From these sales, every third euro is made by a four-party oligopoly. The industry’s leader, the Tönnies Holding, alone generated a record revenue of 7.3 billion Euro in 2019. According to Forbes, the company’s owner family holds a private wealth of 2 billion euros.

The flourishing of the German meat business is not only due to the efficient exploitation of workers and animals at domestic productions sites. Tönnies and PHW, among others,  also benefit from international relations of exploitation and dependency, from the division of the world into imperialist centers and peripheries. Take the very fact that workers from Eastern Europe are willing to do the hard work at the slaughter lines in Germany at an extremely low wage, which cannot be explained without the unequal development in Europe forced by German imperialism and the resulting existential dependence of many people on any job, no matter how bad. Beyond that, German meat capital is one of the profiteers of the imperialist world system due to foreign investments, feed imports and meat exports.

Geographic expansion: profit increases by capital export

To overcome the barriers to accumulation resulting from domestic market saturation, meat companies do not only rely on exports of finished commodities. They also raise their profits by exporting capital to countries with large markets, cheap labor and low social standards.

Take Tönnies: After the corporation had made the highest turnover in its history in 2019, co-owner Clemens Tönnies announced an investment of 500 million Euros in China. Together with the Chinese Dekon Group he aims at building a new abattoir in Sichuan province, which is to slaughter 2 million animals per year. With his first production site in the People’s Republic, Tönnies is continuing his geographic expansion, which is in full swing with 29 production and sales sites outside Germany so far. For the near future, he also envisions production steps upstream of slaughter, such as piggery for foreign investment.

The largest German poultry producer, the PHW Group, has invested abroad, too. Apart from the two Polish subsidiaries Drobimex and Bomadek, the corporation holds shares in the Bulgarian Ameta Group. About a fifth of PHW’s sales stem from these foreign holdings. By producing on site, it wants to conquer foreign markets, as CEO Wesjohann explains, because »there are segments in which we are not competitive with German commodities«. However, Poland has advantageous animal protection laws (allowing a higher »stock density« of 42 kilos per square meter) and »much lower labor and construction costs« (own translation).

This expansion does not only bring with it the exploitation of workers and animals in other countries by German meat capital. It also entails the transfer of profits produced elsewhere to company headquarters located in Germany. Thus, capital exports strengthen the concentration of social wealth in the hands of just a few profiteers in the imperialist centers. At the same time, they count with a growing power to decide over what is produced, where and under which conditions.

Feed crops in South America

The fact that currently more than 70 percent of all agricultural land worldwide is used for the cultivation of animal feed or as pasture land is another consequence of Big Meat’s accumulation strategies. Today, this land is not available for a socially and ecologically useful production, e.g., of plant-based food, or for the reforestation of deforested areas. In Germany, the share is »only« about 60 percent because a part of the feed is imported. In order to keep the slaughterhouses profitable and to buy animals at rock-bottom prices, high-protein soybean meal is added to the feed, which accelerates fattening. In Germany, however, this oilseed is not cultivated. Germany therefore imported about 6 million tons of soy in 2018, including from South America.

The meat industry—a leading beneficiary of these imports—is thus pushing what people in Argentina call »soyafication« (»sojización«). This notion refers to the massive expansion of the area cultivated with soy to nearly 20 million hectares, as well as to Argentina’s economic dependency on soy exports. In Brazil, soy is currently even grown on 36 million hectares, an area as large as Germany.

The list of accompanying problems is long. The industrial production of soy and its expansion have led to the destruction of vast rain forest areas and other ecosystems. The concentration and centralization of capital is increasing in South American agribusiness, and with it the displacement of small farmers. At the soy frontiers, indigenous and other communities are often violently displaced and dispossessed. The hourly wages of those workers who have not become members of the industrial reserve army, i.e. who have been able to find jobs despite the highly technologized agriculture, are poor. Finally, many people suffer adverse health effects from the use of agricultural chemicals.

In short, while local food sovereignty declines, German meat capital—together with local agricultural capitalists—profits from South American agribusiness by using soy as an effective and cheap means of production—at the expense of socioeconomic consequences and a huge destruction of nature.

Frozen Chicken

Downstream of meat production, the export of cheap meat is one of the reasons why competitive food industries often cannot be build or maintained in the peripheries of the imperialist world system. In many instances, the latter become dependent on cheap meat imports. Today, Germany is primarily selling meat to other European Union-members. According to the NGOs Germanwatch and Miserior, however, German exports of pork, poultry and by-products at dumping prices to the world’s poorest countries quintupled between 2000 and 2015.

The example of Ghana shows how ruinous such trade relations can be. As a star pupil of neoliberalism, the country has become a favorite of global corporations that make use of its deregulated market. Among others, poultry companies from the EU sell frozen chicken for which they do not find buyers in Europe: former laying hens, their offal, feet etc. EU’s big meat capital’s profits would be guaranteed without these exports of abattoir by-products. But by selling them dear, they can make extra profits and expand their power on the markets beyond Europe.

According to Deutschlandfunk, Ghana still produced 80 percent of the poultry consumed in  the country in the 1990s. Today, however, the sector is »nearly dead« because it was impossible to compete with the frozen imports from the EU. Most of the local chicken farmers and slaughterers have lost their jobs.

State support

The profits that capitals in the imperialist centers make in and through international relations of exploitation and dependency cannot be realized without state support, for example by free trade agreements or subsidies.

The German state purposefully patronizes the efforts of »its« meat capitalists to expand, among other things, by an export funding program of the Federal Ministry of Food and Agriculture (Bundesministerium für Ernährung und Landwirtschaft, BMEL). The ministry states that exports »have become an important sales strategy« due to high competitive pressures on the home market. The funding program is therefore intended to open up foreign markets. High-ranking politicians accompany business delegations to selected countries in order to achieve changes in the institutional environment. In other words, German state representatives aim to enforce politics that benefit German meat imperialism.

In this context, the European Union’s Common Agricultural Policy (Gemeinsame Agrarpolitik, GAP) also plays a central role. It enables area-based direct payments and investment support for meat capitalists. According to a study by the NGO Germanwatch, these policies help them »to export their products at prices below the actual production costs« (own translation).

Further means are the removal of trade barriers and the establishment of free trade agreements. Over the past years, the EU has been negotiating so-called »Economic Partnership Agreements« with several peripheral states, intervening in their economies. Ghana, for example, has been asked to lift 80 percent of its trade tariffs on imports from the European Union. If the country does not cooperate, punitive tariffs lurk in the background, and Ghana would lose its market access. The import of soy is flanked similarly. During the negotiations of the EU-Mercosur free trade agreement, which are currently frozen, Argentina approved a treaty text in 2019, which would obligate the country to massively reduce its export taxes on soy. While this would further reduce its already low state income, European meat capital would benefit from cheapening prices for its means of production. Thus, referring to such treaties, world system analyst Immanuel Wallerstein rightfully denotes free trade to be »free-trade imperialism«.

With state support, German meat capitals profit from exploitation, uneven capitalist development and nature destruction. By expanding into foreign markets, they have aimed to decrease their economic dependency on domestic consumption. Even if meat consumption in Germany should be further reduced, companies like Tönnies, PHW and others would not necessarily reduce animal killing and the destruction of nature. And they would not stop appropriating the surplus value produced by workers. Anyone who really wants to put an end to their brutal business has to question the capitalist property and production relations, and to consider corporate strategies beyond German borders. Meat capital is a profiteer of the imperialist world system and it needs to be fought accordingly.

Christin Bernhold and David Müller

Originally published in german here: Das FleischkapitalIm Zentrum des imperialistischen Weltsystems