Pod Foods reposted this
Fresh off of its successful block of the Kroger-Albertson's merger, the FTC is taking action against Southern Glazers's on its pricing to Costco and Kroger. We need to be careful what we wish for with this type of enforcement of Robinson-Patman by the FTC. I'm all for supporting small businesses of all kinds, but we have to allow the laws of physics to dictate pricing in a free market economy. When I was a wine buyer for Whole Foods, I got a lower price for buying a pallet of Clos Du Bois Chardonnay than if I bought a single case. When I bought a 40 ft. container of aged Gouda, I got a better price than if I bought a pallet. When we bought a truckload of Georgia blueberries during the flush and sold them at 99 cents at Lucky's, we got a better price than if we bought a few cases. Likewise, when Costco buys many truckloads of a small number of wines from Southern Glazer, they pay less than an independent wine shop who buys single cases. This isn't unfair, and it shouldn't be illegal. Independent businesses and smaller chains can compete on great service, in house production, speed to market, local sourcing, differentiation, and exclusivities to create important niches for themselves and consumers. If we require manufacturers and distributors to deviate from the actual cost basis of delivering products and ignoring scalar economy, this will ultimately dive prices up for consumers and stifle innovation. Pod Foods #innovation #FTC #grocery
Errol Schweizer
18h
The FTC lawsuit is about ensuring the practices you described, and alleged that Southern is doing otherwise. I am looking forward to what comes out in the discovery phase. https://www.ftc.gov/news-events/news/press-releases/2024/12/ftc-sues-southern-glazers-illegal-price-discrimination
Mike Bloomfield
20h
Volume discounts make sense for both parties that can take advantage, leading to ~hopefully~ a lower price to the consumer. Discount availability vs discount utilization seems to be the question here. The discounts should be available to all, but that doesn’t mean all are in a position to take advantage. As long as there isn’t an active effort to withold, hide, or deter discounts to particular customers… I’m with you, not unfair and shouldn’t be illegal. Thanks for sharing, interesting read this morning.
Somehow almost everyone I know pays more than double for haircuts when supercuts exists at half the price. If you are looking for brand leaders at the cheapest price possible, Costco is where you go. I personally rarely go there because I hate navigating the traffic jam of shopping carts and waiting in lines.
Josef Rosenfeld
19h
This is what happens when you have people who have never had to go out an develop customers, sell anything for profit, much less understand scale and the logistics to support scale, or lack thereof; who believe they are actually doing the right thing, have the authority to try and do it, regardless of the consequence and cost.
Eric Martindale
21h
You have to be kidding me. I just put up a post sort of recapping the implications of the Kroger Albertson’s antitrust suit. The FTC no longer protects competition. They prevent it.
Jeremy A.
14h
This is such an insightful perspective, Peter. Bulk purchasing has always been a cornerstone of supply chain efficiency and pricing fairness in a free market. How do you see smaller retailers innovating to compete without these economies of scale?
Sheikh Rabbi
21h
Send me connection please✅✅
VP - Kroger Team | Strategic Partnerships, Data-Driven Solutions
19hVolume discounts are legal under Robinson Patman as long as the discount is not provided due to the buying power but is instead due to the efficiencies gained by by shipping higher quantities or full pallet quantities. There is also a defense that allows for you to invest to meet competition if necessary to be competitive within a market. It has been a while since Robinson Patman has been litigated in this space and certainly something we may see more of as smaller independents and regionals certainly have been feeling the challenges in competition sometimes due to lack of investment by CPGs in their business.