Link: http://business.timesonline.co.uk/tol/business/industry_sectors/consumer_goods/article3349415.ece
This article is about the German Federal Cartel Office raiding seven companies, including Nestle, Mars, Kraft, and Ritter because of a suspected collusion on price rises. It appeared that all of the companies had between a 10 to 12 percent all within a few weeks of each other.
The cause of this price rise was claimed to be becasue of an increase in the price of cocoa and nuts. It seems to me that this price rise is very likely, because as prices of ingredients go up, companies are going to be forced to raise the prices of their products. Therefore, as one company was forced to raise their price, it probably forced the other companies to raise their prices as well.
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4 comments:
It seems like raising the price of the goods wouldn't benefit the companies very much. Once the price was increases, there would be a decrease in the quantity demanded of the chocolate, and the companies would be right back to where they started.
i also wonder the proportion of price change in product and resources. Resources rise all the time, the economy fluctuates, so it is common for companies the change thier prices, and many at the same time because of similar resources used. There has to be somehting bigger, more incrimenating with this story than just a raise in resourcesto cause factories to be raided.
Just think how my more fun it would to raid a nestle chocolate lab rather then a meth lab... sign me up for that job!!!
nice picture btw...
Is there an elasticity of demand for chocolate?
:)
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