Industry continues to contract structurally — upstream and downstream — and attract antitrust attention.
Unilever and McCormick this week announced a deal to combine Unilever’s global food business with McCormick in a transaction valuing the combined company at approximately $65 billion, one of the largest food-sector transactions in recent years. The deal will place iconic pantry brands—Knorr, Hellmann’s, French’s, Frank’s RedHot, and Cholula—under a single corporate roof, creating what the companies describe as a global “flavor powerhouse.”
The move would be structured as a Reverse Morris Trust which allows a company to divest a business tax‑free by spinning it off to shareholders and immediately merging it with another company, so long as the seller’s shareholders retain majority control of the combined entity.
For antitrust observers, the timing is notable. The announcement comes just days after a major grocery-sector transaction – Sysco’s $29 billion bid to take over Restaurant Depot – underscoring a broader trend: consolidation is accelerating across multiple layers of the food industry, from retail to distribution to branded consumer packaged goods.
What Unilever and McCormick hope to accomplish.
From a business perspective, the Unilever–McCormick transaction reflects a strategic pivot by both companies. Unilever has been steadily exiting slower-growth food assets to focus on higher-margin personal care and beauty lines, while McCormick is betting that scale and global distribution will strengthen its position in spices, condiments, and prepared foods. Under the deal, Unilever shareholders will own roughly 65% of the combined entity, and Unilever will receive $15.7 billion in cash. McCormick will remain the surviving company. Sources: Reuters; Yahoo Finance; FinancialContent/MarketMinute.
Unlike horizontal grocery mergers that combine direct competitors at the retail level, this transaction sits higher in the supply chain, in branded food manufacturing. That distinction matters for antitrust review—but it does not eliminate scrutiny.
Competition issues in the food industry.
Taken together with recent grocery and food distribution deals, the planned McCormick–Unilever combination reinforces a broader structural trend: fewer, larger firms exerting greater control over pricing, shelf space, and supplier relationships. As consolidation moves upstream into manufacturing and brand ownership, the competitive effects can ripple downstream to retailers and consumers.
That backdrop is especially relevant given the Federal Trade Commission’s repeated focus on concentration and pricing power in the food sector. In a 2024 report examining grocery supply chain disruptions, the FTC under the Biden administration concluded that large firms were better positioned than smaller rivals to weather shocks, and in some cases used those disruptions to entrench their market power and sustain elevated prices.
More recently, federal policymakers in the Trump administration have framed food-sector competition as a national economic issue. A December 2025 executive order directed the FTC and the Department of Justice to investigate potential anticompetitive conduct across the food supply chain, including manufacturing, distribution, and retail, with particular attention to price fixing, market concentration, and foreign control.
Antitrust issues in Unilever–McCormick?
While the Unilever–McCormick deal does not combine two traditional grocery retailers, antitrust enforcers may examine:
- Brand-level concentration in specific product categories such as condiments, seasonings, and cooking aids.
- Buyer power and bargaining leverage over retailers and foodservice distributors.
- Effects on smaller and private-label competitors, particularly where shelf access or promotional spending is critical.
- Portfolio effects, where ownership of multiple must-have brands could influence pricing or distribution decisions.
Recent antitrust scrutiny of the food sector reflects a sustained federal concern that consolidation across the food supply chain can affect prices, suppliers, and consumer choice nationwide. Based on our review of FTC and DOJ statements, White House executive orders and fact sheets, and reporting by Reuters and other business publications, concern about the supply chain has been present across administrations, though expressed with some differences in emphasis.
During the Biden administration (January 2021–January 2025), antitrust agencies increasingly urged a holistic examination of the food industry, encouraging enforcers to look beyond narrow product categories to assess cross‑category consolidation and broader supply‑chain dynamics. The FTC and DOJ frequently framed competition in the food sector as a national economic issue, linking market concentration to food prices and supplier bargaining power.
That focus overlapped with actions taken early in President Trump’s second term, including his December 2025 executive order, reinforcing executive‑branch attention to food‑sector concentration and pricing.
By contrast, during President Trump’s first term (January 2017–January 2021), FTC enforcement generally reflected a more traditional approach, emphasizing narrower market definitions and competition among direct competitors. While antitrust cases were pursued, there was less sustained focus on cross‑category effects or system‑wide supply‑chain dynamics.
Overall, these developments suggest not a sharp shift, but a gradual evolution in how federal agencies approach competition in the food sector. Both presidents treated food prices and market structure as matters of national economic importance, with differences largely at the margins of scope and analytical emphasis.
The significance of a McCormick–Unilever merger.
This transaction underscores how consolidation in the food sector now extends well beyond grocery shelves, reshaping the entire food ecosystem—from upstream inputs to branded consumer goods. For companies operating anywhere along that chain, the signal from regulators is clear: scale, scope, and pricing power in food markets are subject to heightened scrutiny.As the FTC and DOJ continue to examine food‑supply‑chain dynamics, large transactions like this are increasingly assessed not in isolation but as part of a broader pattern of structural contraction. While a McCormick–Unilever deal could ultimately clear regulatory review, it arrives at a moment when antitrust enforcers are asking more pointed questions about control over the nation’s food supply, portfolio effects across product categories, and the downstream consequences for competition, retailers, and consumers.
Is the food industry really contracting? When antitrust commentators describe the food industry as “contracting,” they are not suggesting that Americans are buying less food or that output is declining. Rather, regulators and economists are using the term to describe a structural contraction: fewer firms controlling a growing share of production, processing, distribution, and retail across the food supply chain.
Federal regulators have explicitly documented this trend. In a 2024 staff report examining grocery supply chain disruptions, the Federal Trade Commission concluded that large, dominant firms were better able than smaller rivals to secure supply, maintain margins, and even expand market power during periods of disruption. The FTC warned that these shocks can leave markets more concentrated than before, allowing major firms to entrench their dominance over time (Sources: FTC, Grocery Supply Chain Disruptions Report, Mar. 21, 2024).
Independent economic research aligns with that assessment. A USDA Economic Research Service study found that food retail concentration has increased substantially over the past three decades at the national, state, metropolitan, and county levels, with local markets often far more concentrated than national averages suggest. The study attributes this shift to the expansion and consolidation of large, multi‑market grocery chains displacing smaller competitors (Sources: USDA ERS, A Disaggregated View of Market Concentration in the Food Retail Industry).
The same pattern appears upstream. Academic and Federal Reserve–affiliated research shows that food manufacturing and processing—particularly meat, poultry, and packaged foods—have experienced sustained consolidation, with higher concentration ratios and fewer independent processors operating today than in prior decades (Sources: Saitone & Sexton, Federal Reserve Bank of Kansas City, Concentration and Consolidation in the U.S. Food Supply Chain).
These findings are no longer confined to academic debate. In December 2025, the White House directed the Department of Justice and the FTC to investigate anticompetitive behavior across the entire food supply chain, including food manufacturing, grocery retail, meat processing, seeds, and fertilizer, explicitly framing concentration as a national and economic security concern (Source: Executive Order on Addressing Anti‑Competitive Behavior in the Food Supply Chain, Dec. 6, 2025).
In short: multiple government agencies and independent researchers agree that the food industry is contracting structurally—not because demand is shrinking, but because consolidation has reduced the number of meaningful competitors across critical segments of the supply chain. The federal government has pledged greater scrutiny. It is greatly needed.
Tom Hagy, Editor-in-Chief, Mogin Law Blog
Within the U.S. foodservice distribution market, Sysco leads with an estimated 17% share, followed by US Foods with around 10% and Performance Food Group at approximately 8%. Collectively, these three distributors account for about 35% of the national market, with the remaining share highly fragmented among hundreds of regional and specialty distributors. These figures are based on Sysco investor presentations, The Food Institute, and Bloomberg Intelligence estimates.