Elaborate? I've already explained that price-fixing does sometimes happen, but it's illegal and governments do crack down on it. People like money, but they also like to stay out of prison and avoid losing that money in settlements.
If anyone is making a just-so argument, it's those claiming "greedflation". The idea that record profits must equate to something nefarious happening is in my view a simplistic just-so statement. At least in America, people built up record savings during the pandemic, and then spent those savings in record numbers once the lockdowns ended. Record profits during a period of record spending seems rather unsurprising, doesn't it?
It's not price fixing. It's what's stocked by big retailers.
Real world example.
Heinz Baked Beans, UK. There are tons of other baked beans brands, but almost every store has Heinz. It dominates the shelf space by a huge margin.
Heinz is specifically called out in the article. They've made massive hikes in price, everyone's complaining about it, but often it's the only product on the shelf for a common, quick meal ingredient in UK meals.
There is no choice. It's not a simple economic choice. Most people can't choose the cheaper brand as often there's no choice.
Heinz Tomato Ketchup is/was in an even more dominant position. Many mid-sized grocery stores literally only stocked Heinz. (the co-op one is a pretty good substitute btw).
While theoretically there is consumer choice in the market, the reality is that it's wasn't true unless you want to go round a bunch of different shops.
In the long run Heinz has done some serious damage to their brand, but short/mid term are making juicy profits as the market is so slow to correct due to the way supermarkets work. How shelf space is allocated. By how the industry has become a small amount of ridiculously large companies hiding behind a patchwork of acquired brands.
If Heinz is the only supplier of baked beans, that is literally just a monopoly. In that case you have a monopoly problem, not an inflation problem.
Do you all not have private label brands? I’ve never been in a UK grocery store but it is hard for me to fathom that you would only have one brand of baked beans, given it is a food regularly consumed in the UK (or so I’m led to understand by the abomination that is beans and toast).
Maybe y'all weren't paying attention when your economics 101 professor said that basic macroeconomics describes general economic behavior, and there can be a lot of other factors?
And how about the fact that at least in the US, we don't have a free market system?
Yeah maybe it does and maybe it doesn't. Do you have any theses to add instead of saying "maybe no?".
A data point to support the original comment is that there are arbitrageurs all over the place. If you are trying to raise your margin, lots of people without any technical or product knowledge will simply buy it cheaper else where and drop it into your margin and eat your lunch. See the whole drop ship economy phenomenon.
Elaborate? I've already explained that price-fixing does sometimes happen, but it's illegal and governments do crack down on it. People like money, but they also like to stay out of prison and avoid losing that money in settlements.
If anyone is making a just-so argument, it's those claiming "greedflation". The idea that record profits must equate to something nefarious happening is in my view a simplistic just-so statement. At least in America, people built up record savings during the pandemic, and then spent those savings in record numbers once the lockdowns ended. Record profits during a period of record spending seems rather unsurprising, doesn't it?
It's not price fixing. It's what's stocked by big retailers.
Real world example.
Heinz Baked Beans, UK. There are tons of other baked beans brands, but almost every store has Heinz. It dominates the shelf space by a huge margin.
Heinz is specifically called out in the article. They've made massive hikes in price, everyone's complaining about it, but often it's the only product on the shelf for a common, quick meal ingredient in UK meals.
There is no choice. It's not a simple economic choice. Most people can't choose the cheaper brand as often there's no choice.
Heinz Tomato Ketchup is/was in an even more dominant position. Many mid-sized grocery stores literally only stocked Heinz. (the co-op one is a pretty good substitute btw).
While theoretically there is consumer choice in the market, the reality is that it's wasn't true unless you want to go round a bunch of different shops.
In the long run Heinz has done some serious damage to their brand, but short/mid term are making juicy profits as the market is so slow to correct due to the way supermarkets work. How shelf space is allocated. By how the industry has become a small amount of ridiculously large companies hiding behind a patchwork of acquired brands.
If Heinz is the only supplier of baked beans, that is literally just a monopoly. In that case you have a monopoly problem, not an inflation problem.
Do you all not have private label brands? I’ve never been in a UK grocery store but it is hard for me to fathom that you would only have one brand of baked beans, given it is a food regularly consumed in the UK (or so I’m led to understand by the abomination that is beans and toast).
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Thanks, this made me laugh. I wish more people would consider such a simple fact.
Maybe y'all weren't paying attention when your economics 101 professor said that basic macroeconomics describes general economic behavior, and there can be a lot of other factors?
And how about the fact that at least in the US, we don't have a free market system?
Yeah maybe it does and maybe it doesn't. Do you have any theses to add instead of saying "maybe no?".
A data point to support the original comment is that there are arbitrageurs all over the place. If you are trying to raise your margin, lots of people without any technical or product knowledge will simply buy it cheaper else where and drop it into your margin and eat your lunch. See the whole drop ship economy phenomenon.