Companies like Kroger are so big they dictate the purchase prices from farms. The farmers were better off in the past with multiple competitors creating a bidding war. Same with consumers, products had to be priced right to win their business.
A company I work for had to give free engineering labor in millions of dollars to get access to one of the largest retailers in the USA. Too big not-to-do-business-with harms everyone except the retailer.
That wasn't always true. The Robinson-Patman Act made it illegal to give preferential treatment to large retailers specifically in order to prevent what we're seeing with walmart and amazon today. The US just stopped enforcing the law (and also anti-trust laws that would have protected local/small businesses) so here we are. At any point the US could decide that enough is enough and fix the situation but we'd probably have to make it actually illegal for corporations to bribe government officials before it stands a chance of happening.
Money exchanged to alter the conduct of a person in position of power... That sounds familiar. I wonder if there's a name for that?
"Bribe: money or favor given or promised in order to influence the judgment or conduct of a person in a position of trust"
..../s (you know, because what's serious these days is hard to tell)
Y'all in the US are so, so cactus haha.
"Nice business you have there, would be a shame if I changed my conduct back again, wouldn't it?"
Are there any countries that don't use the quid pro quo definition of bribery? At best, they try to keep a lid on it by capping campaign contributions, but that's not really "bribery is illegal" (if we accept the more liberal definition), more like "there's a limit on how much you can bribe".
Glad I haven’t been bribing mechanics that work on my car.
I only pay them after the work is done!
Edit: typos
If you are a bureaucrat, the way to maximise your next paycheck is often to be especially tough on companies (and on the margin push for more complicated rules that you can be an expert in). Simplified, the logic is "See how tough I am, you better give me a good paycheck to make sure I'm playing on your team."
The beauty is: the bureaucrats at the regulator don't even need to consciously think this way. They can be tough out of the ideological and conscientious conviction at the bottom of their heart, and the mechanism that gives them comparatively higher pay afterwards still works. Being tough also raises your profile, when you are but a junior or middling drone.
The logic you are describing might work, but only for the most senior appointees who already have a high profile.
Tiger's in the house, y'all. And the roof is on fire. And the water is unavailable because it all got sold to nestle [4].
0 - https://www.npr.org/sections/itsallpolitics/2013/11/11/24397...
1 - https://www.washingtonpost.com/powerpost/in-trump-era-lobbyi...
2 - https://www.cpr.org/show-segment/its-common-for-lobbyists-to...
3 - https://publicintegrity.org/politics/state-politics/copy-pas...
4 - https://kitoconnell.com/2016/09/27/nestle-spent-11m-lobbying...
We all know bribes happen, but for the law to recognize a bribe as a bribe basically requires the two parties to have a signed and notorized legal document statating that they are knowingly entering into a quid pro quo, and that both parties are aware it's illegal to do so. Anything less than this, and it will never be prosecuted.
Price collusion is illegal too, but happens all the time. There being a law for it just makes the rare fine a cost of doing business.
"Legality" has never stopped big companies from doing these things. Google, Apple, Meta, etc has been receiving fines all day long and they still continue what they do.
Fines becomes a business calculation. Not a deterrent, not if it matters to the big corporation. Which at some scale, it will become cost-effective.
Seriously, though: I cannot believe how high and how far these utterly dogshit arguments flew without pushback and the amount of damage that consolidation has done to the American Experiment. The best time to get a Lina Khan in the FTC was 40 years ago but the second best time was 4 years ago. I just hope the next president picks up the project... though I'm sure the (by then) trillionaires will do everything in their power to stop that from happening.
I was young and dumb enough then not to know that, for example, 7-Up and Sprite were not independent soft-drinks. I assumed every flavor of soda was its own company. I soon started to notice the drink pattern based on whether they had Coke or Pepsi. Those two owned all the other flavors—and they each had their own variant of the other's.
I was told too by management that we only bought Pepsi drinks. Again, native me thought, "Why not have both Coke and Pepsi and let the customer decide?" I am not sure whether there was a pricing issue that prevented management from buying both—like the loss of a discount for going Coke-only or whatever.
Of course you always saw signage, etc. around the restaurant with Pepsi logos (or Coca-Cola logos at other restaurants) so you knew there were gifts in other forms that one of the two would entice the owner with.
What a slow growing up I have gone through since then. It seems like the kind of thing they ought to teach in primary education.
To give an example Yum! brands (KFC, Pizza Hut, Taco Bell, etc) was formed as a subsidiary of PepsiCo. Although PepsiCo has divested from Yum, their pre-existing relationship is why these restaurants only serve Pepsi's soft drinks.
Deal-making is also why you see patterns like this emerge in other places such as convenience stores that only sell beverages from the Coca-cola company (i.e. higher volume sales from just one supplier yields a better discount than splitting sales across multiple suppliers). It's relatively rarer to see more than one beverage supplier at a restaurant, club or convenience outlet.
Because over here in the UK, every shop I've seen that sells soft drinks sells both brands at the same time. Probably alongside a bunch of others.
Then again, the branded coolers seem to be more of a thing in restaurants and takeaways rather than shops.
I presume, but don't know first-hand, that for built-in coolers you want stocked by the distributor, they'll also require segregation. Frito-Lay distributors operate similarly--they'll come in and stock your shelf if you want (I dunno if there's a sales premium), but typically they'll require the Frito-Lay products be segregated, and they'll provide branded shelving if you want.
https://www.coca-colacompany.com/about-us/leadership/roberto...
Or is that just urban legend?
The only restaurants I’ve ever seen selling Coke and Pepsi were in less developed countries…
Wait what? What do you mean by convenience outlet? We must have different definitions.
If you want to, say, have a student group sell cookies or whatever, the provider has to approve and you have to pay to host it.
The contract is for 10 years. No freaking way somebody signed off on that without money under the table.
It is truly an awful contract, with no benefit at all to the employer that I can see. Like you, I conclude that some executive must have gotten kickbacks for signing this.
The benefit is having an operating cafeteria (i.e. an amenity) for a guaranteed period with little or zero out-of-pocket expense other than providing the space. Unless there's obviously high-demand (coffee?), no catering company is going to commit to a long-term contract without ensuring some minimum volume to maintain staffing. Anything food related typically has ridiculously slim margins on average, especially when you count all the failed projects.
Catering is often an exception, but not this kind of daily staffed in-place catering. The most profitable kind of catering is where you can prepare food offset for discrete (though hopefully recurring) events across many (hopefully repeat) clients, and where you can quickly ramp up or ramp down staffing and facilities to minimize recurring costs.
Coke used to sell their high volume customers a different syrup, and give them different equipment to pour it, that was incompatible with the low volume customers equipment, to try and stop this
Why? Is it that hard to imagine pepsi doing it in an above-board way, eg. giving a discount to the university directly?
The buyer at the university could just be doing their job, signing contracts to ensure (ideally) stable vendors and a good price by signing such a long contract term.
Why is it so hard to imagine people who work in education would have flexible ethics for personal gain?
If I was working a cushy admin job, I'd need way more bribery than $5 worth of coffee and doughnuts to intentionally select a worse vendor, especially if the decision would negatively impact my colleagues and get me flak.
>Why is it so hard to imagine people who work in education would have flexible ethics for personal gain?
Because if you read the other comments, there are perfectly reasonable explanations that don't involve graft. Jumping to "bribe" every time there's bad behavior is just lazy thinking and means you don't actually figure out what the root of the problem is.
But a lot of people are poorly paid and free coffee is nice.
It might not be enough to select a worse vendor but if two are equal it’s easy to pick the one with the cute sales representative who knows how you like your coffee.
Then there is the leadership who plays golf together and use the company card to buy gifts (booze) for the deciders.
It’s not bribery it’s just subtle influence;)
And it’s everywhere, it’s the same at the various higher education colleges I worked at.
Right. I'm sure, in spite of this and the decades of overwhelming evidence, this was all just a silly coincidence, and they can lower food prices now.
Edit: I'm shitlimited to five posts per X number of hours, so I'm going to respond here: the evidence is in TFA, thanks.
Where's all this "overwhelming evidence"? So far the only that's presented is "my university is pepsi only so there must be something shady going on" and "vendors buy me coffee so there must be administrators corrupting themselves and risking their 6 figure jobs for $5 worth of inducements"
edit:
>Edit: I'm shitlimited to five posts per X number of hours, so I'm going to respond here: the evidence is in TFA, thanks.
Searches for "bribe" and "kickbacks" don't turn anything up. If you're talking about the unsealed FTC complaint, that's anti-competitive behavior, but not the "kickbacks" that OP was talking about (ie. some administrator abusing their position of trust to personally enrich themselves). Both are bad, but they're not remotely comparable. For one, in the case of kickbacks, the organization and its members are harmed (through worse contracts), whereas for whatever walmart and pepsi agreed to, both benefited.
By bringing this up in a thread talking about kickbacks, it sounds as if you're trying to equate the two. Please don't equate this to a "kickback." It's not what that is. There's real standards to what denotes bribes and kickbacks and that's not what those are.
> flexible ethics for personal gain?
If you let the donuts influence your judgment, that is an ethical problem -- I agree. But if you operate in your organization's best interest you can enjoy the coffee and donuts without remorse.
- directly owned and managed by the brewery
- owned by the brewery and leased to a manager, like a franchise
- independent, but contracted exclusively
- genuinely independent
Contracted pubs may also have limited supplies of "guest ales". Usually there's sufficient local competition to keep the pubs good, but local monocultures can also be a problem.
There's a bunch of pricing stuff (typically the bottler sells syrup and rents dispensers and may supply drinkware, and you get discounts on everything when you buy more syrup, and you get advertising subsidies when you put the brand logo in your ad, etc), but there's also logistics. More options means a bigger soda fountain and probably more space storing syrup.
I'm not sure I've ever seen mixed brands in a single dispenser (other than 7up+DrPepper which is bottled regionally by Coke bottlers in some regions and Pepsi bottlers in others; so you might see Coke with 7up and DrPepper or with Sprite and MrPibb). But, rarely, I've seen dispensers from both. Mostly at convenience stores and also the Yahoo employee cafeteria at the Sunnyvale HQ on First Ave (which they left some time ago). Some restaurants that don't have a fountain will stock cans from multiple brands, too.
All that said, from my life experience, very few people express a strong preference, giving customers a choice probably isn't worth the effort.
https://finance.yahoo.com/news/dr-pepper-end-partnership-cok...
Restaurant owners will sign a contract with a distributor to buy only from them, and in exchange get discounts, free equipment rentals such as drink fridges and beer taps, and things like sunshades, tables and chairs, signage, etc.
https://waldenconsultants.com/2020/04/13/yet-another-study-s...
https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...
I'm a habitual enough soda drinker that I'm a six-pack-a-day diet soda drinker (don't judge me, at least it's not Red Bull). I notice that there's vendor collusion at Walmart for months at a time where the Pepsi six-packs will typically go on sale for a few months at a sub-$4 to $5 price (currently it's $4.98) while Coke packs will be $5-6 off sale.
Cycle three to four months and Coke will enter the $4 position and Pepsi goes back up to a full retail price for the next quarter.
I've always seen the 'cycle' of the two competitors constantly hitting a 'sale' price across various retailers.
Sadly for this RedBull drinker, they never go on sale, at all, ever, anywhere.
I hate to say it, but was he proven wrong? People are still buying junk food and soda (their primary products) despite prices going up. Looking at Pepsis profit margin, it seems to have hovered between 9.5% and 10.5% since 2021.
And even if people buy a lot of junk food, they might have bought competitors’ junk food. Laws are still laws even if you don’t like the people the laws protect.
Pricing discrimination combined with monopsony(single large buyer) or monopoly ( single large seller) powers is not market efficient. It leads to higher prices by end consumers. Price discrimination via collusion + Walmarts monopsony in grocery industry violates that 1930s act and is illegal
Why? Unless there was some kind of payola, this is doesn't make sense.
But, beyond that, while logically voters should vote against politicians that favor businesses over them, they often appear to do the opposite. They simply gain the label of "business friendly".
Capitalism in practice: a relative handful of rich people cooperating with each other to extract as much money as possible from the middle and lower classes.
You can see which version of capitalism this document supports.
The "fiscally conservative" aspect of the Republican party (and the Democratic party to a lesser degree) don't want people to think of capitalism-in-practice; they want happy consumers who think that competition is still a thing. Since this document clearly goes against that narrative, it must be suppressed.
A couple other ways of looking at it come from Bataille, Odum, Prigogine or Schmitt.
no, not clear at all.. it is a system that filters. "rich people" go broke all the time, Britain too.. There are serious structural problems certainly but that does not describe them
Pepsi is exchanging profit for market-share. Be serious. Everyone else is just charging the standard price.
Market failures ought to be accounted for with regulation (they often are, that's what Liberalism is for), but this is not one.
The unessential garbage fuelling our obesity crisis has no place in the conversation about the affordability crisis whilst policy-makers and armchair experts are mulling a sugar tax, which would just raise the price. Notwithstanding, profit margins at grocery stores are not large in the first place. The reason profits are breaking records is that population is also breaking records, and customers are spending more on boutique animal alternative or organic boxed products. Margins on produce are as thin as ever. Canned black beans and soup are not making their billions.
Trump's people don't want to get on the bad side of monopolists because people like Elon Musk and Munger's son won't dump hundreds of millions of dollars into keeping them in office (and out of jail).
Notice how I didn't mention you or me in either of those two agreements. That's because we aren't even noticed.
It makes perfect sense if you understand for whom Trump's people are working. It isn't much different than the democrats, but we should note that Lina Khan was appointed by Biden. And, Matt Stoller has another great article about attempts by Biden to correct the financial system with nominations like Omarova. Republicans couldn't get past calling her communist which is patently ridiculous. Drain the swamp indeed, MAGA.
First, that made me raise an eyebrow.
> ...and failed.
Then, that made me laugh.
> And now there’s a political and legal storm as a result.
Finally, that made me sigh, because nothing's gonna happen. The "storm" will pass, as it always does.
Pretty sure oatmeal is a nutritional foodstuff.
Lol so it's a price-cut. They offer Pepsi at lower margins, in a store known for lower prices, in exchange for being boosted. And somehow this translates to a conspiracy to raise prices everywhere else.
This is pathetic.
> As a result of Food Lion threatening Walmart’s price gap, Pepsi created a plan to nudge Food Lion’s retail prices on Pepsi products upward by reducing promotional payments and allowances to Food Lion and raising other costs for Food Lion
This is circular. You are just describing a selective/privileged discount, again.
Food Lion could of course sell some items at a loss (Walmart did this, to gain market share and beat out smaller businesses). Costco continues to sell hot dogs at a loss. But that probably wouldn't work for Pepsi products in this context; fortunately, there are other products beyond Pepsi.
I actually doubt this is remarkable in the world of major producers and retailers (e.g. I've heard anecdotes of brands sending around reps to ensure that their shelves at retail stores are appropriately well lit and placed, so having an agreement on price seems pretty normal). However, it's probably a good case to get the public thinking about the desireability of such an oligopoly -- evidence that it's not merely better economies of scale and logistics that are keeping Walmart's prices low, but also explicit, private deals that feel shadier. I don't know that anyone did anything objectionable here given the norms and incentives in front of them, but it's a bad look for those norms and incentives.
Only one company sells it (obviously). Pepsi is enforcing a retail price differential between Walmart and other retailers.
This is a violation of US law
They write the rules.