Web Desk , July 6, 2023: Despite the rising cost of living and inflation globally, 722 of the biggest companies are making windfall profits of more than $1 trillion a year (£780 billion).
These profits resulted from “soaring energy prices and rising interest rates”, The Guardian reported, citing research by development charities.
Based on an analysis by the charities Oxfam and ActionAid of Forbes Global 2000 ranking, these companies made $1.08 trillion in 2021 and $1.09 trillion last year.
The collective profits of these two years surpassed those of the previous four-year average — covering 2017-2020 — by 89%.
“For this analysis, windfall profits are defined as those exceeding average profits in 2017-2020 by more than 10%,” a press release by Oxfam International stated.
According to the press release, energy companies recorded the highest windfall profits.
45 energy firms on Forbes list made an average of $237 billion a year in windfall profits in 2021 and 2022, the research stated.
It further added that the surge in energy profits has led to the creation of 96 energy billionaires — with a combined wealth of nearly $432 billion, which is around $50 billion more than in April last year.
Furthermore, a surge in profits was also reported by food and beverage corporations, pharmaceutical companies, banks and retailers, despite the fact that more than a quarter of a billion people in 58 countries experienced acute food insecurity in 2022.
Given these exorbitant profits, accusations of “greedflation” have increased.
“There is a growing body of evidence that corporate profiteering is playing a significant role in supercharging inflation, echoing fears that corporations are exploiting the cost-of-living crisis to boost profits margins —a trend dubbed greedflation,” Oxfam’s press release stated.
According to the press release, the analysis found:
18 food and beverage corporations made on average about $14 billion a year in windfall profits in 2021 and 2022 — enough to cover the $6.4 billion funding gap needed to deliver life-saving food assistance in East Africa more than twice over.
28 drug corporations made an average of $47 billion annually in windfall profits, and 42 major retailers and supermarkets made an average of $28 billion.
Nine aerospace and defense corporations raked in on average $8 billion a year in windfall profits even as 9,000 people die every day from hunger, much of that driven by conflict and war.
Oxfam’s head of advocacy Katy Chakrabortty said: “These eye-watering excess profits are not only immoral.
“We are also seeing increasing evidence that a corporate bonanza is supercharging inflation, leaving millions of people in the UK and around the world struggling to pay their bills and feed their families.
“When the windfall profits of 18 food and beverage corporations are more than twice the amount needed to cover the shortfall in life-saving assistance to tens of millions of people facing hunger in east Africa, it is clear governments need to act.
“We need to see windfall taxes introduced across the board and an end to this racket, where rich shareholders are rewarded at the expense of everyone else.”