Corporations are using the excuse of inflation to make fatter profit

The real reason for inflation is the increasing concentration of the American economy into the hands of a relative few corporate giants with the power to raise prices. In the process, they’re raking in record profits even as they try to screw employees.

According to Raw Story, “in April, Procter & Gamble announced it would start charging more for consumer staples ranging from diapers to toilet paper, citing “rising costs for raw materials, such as resin and pulp, and higher expenses to transport goods.” That was rubbish. P&G continues to rake in huge profits. In the quarter ending September 30 (after its price increases went into effect), it reported a whopping 24.7 percent profit margin. It even spent $3 billion during the quarter buying back its stock.”

The reason it could raise prices and rake in more money is P&G faces almost no competition. The lion’s share of the market for diapers (to take one example) is controlled by just two companies — P&G and Kimberly-Clark — which coordinate their prices and production.

Raw Story

Here’s another. PepsiCo (Frito-Lay, Gatorade, Quaker, Tropicana, and other brands), and Coca-Cola. In April, PepsiCo announced increasing prices, blaming “higher costs for some ingredients, freight, and labor.” That was pure nonsense. The company didn’t have to raise prices. It recorded $3 billion in operating profits through September.

And still another half of the recent rise in grocery prices is from meat products — beef, pork, and poultry. Just four large conglomerates control most meat processing. They’re raising their prices — and coordinating their price increases — even as they’re scoring record profits. Here again, they’re using “inflation” as an excuse.

So why is this happening?

1ne: Corporations know consumers are flush with cash and want their money.

2wo: They believe that consumers won’t desert them if they raise prices.

3hree: They believe consumers are too dumb to know what’s happening.

4our: CEOs want a huge payday and increased sales satisfy investors.

This is a huge mistake. Sales of private label products are increasing rapidly, and some chains have even introduced premium personal label products, which are still less expensive than national brands.

Another example of corporate greed is Kellogg’s. They have made almost $2 billion in profit, but they only offered their workers a 3% raise while trying to hire new employees with fewer benefits to break the union.

Finally, the underlying problem is not inflation. It’s lack of competition. Since the 1980s, two-thirds of all American industries have become more concentrated. Monsanto now sets the prices for most of the nation’s seed corn. Wall Street has consolidated into five giant banks. Airlines have merged from 12 carriers in 1980 to four today, which now control 80 percent of domestic seating capacity.

The media is slowly picking up on this sham, and corporations will be exposed. Consumers will have their revenge when unit sales decline and go to competitors.

Originally published at https://www.newmediaandmarketing.com on December 16, 2021.

--

--

--

Marketing leader with over 20 years of online and offline award winning experience valued by clients

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

Pharma’s greed is killing people and is all about money

How To Sell Clothes Online For Money (2022 Guide)

How To Sell Clothes Online For Money (2022 Guide)

Venn — A New Way of Neighboring

What WeWork is missing

5 Steps to Brokering Innovation

Fascinating Tips to Succeed in E-commerce Business in 2019

Media Tech Venture Studio Participant Q&A: Ad Lightning

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Richard A Meyer

Richard A Meyer

Marketing leader with over 20 years of online and offline award winning experience valued by clients

More from Medium

How to Make Vegan Pizza in 3 Minutes

Picture of a small round vegan pizza on a plate.

France Has Made Vaccination Mandatory For Competing International Athletes

The Threat of a Nuclear Iran Demands a More Unified Middle East

Helsinki -The Play -Chapters 4, 5 & 6