The Competitions and Markets Authority has found that within the groceries sector of capitalist sector of British capitalism, ‘Some branded suppliers have pushed up prices by more than their costs increased.’
‘ Across the food and groceries sector, the CMA found that high inflation has been driven largely by rising input costs, particularly for energy and key agricultural inputs like fertiliser. But the evidence collected by the CMA indicates that, over the last 2 years, around three-quarters of branded suppliers in products such as infant formula, baked beans, mayonnaise, and pet food have increased their unit profitability and, in doing so, have contributed to higher food price inflation.’
Surprise, surprise as Cilla used to say.
However, own label products often provide cheaper alternatives with suppliers of these products earning lower profit margins and competing to win and retain contracts from retailers. In all but one of the relevant product categories the CMA looked at, as food prices have risen, many consumers have switched away from brands towards own label alternatives, or reduced their consumption, leading to a decline in brands’ market shares and profits. This switching is positive for competition and allows those able to switch, to lessen the impact of high food price inflation. ‘
Howzabout a system of society where where free goods and services are produced for use not profit and the only competition would between producers trying their hardest to improve the quality of their goods and services for all of society.
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