The other day my son tried to explain to me why products on the supermarket shelf cost so much and all the various stages of production and costs in between. From the farm, the processing/packaging stage, to the distributors, then on to the shelf in the shops… Of course I know all that ‘supply chain’ stuff but I humoured him. It’s good he is getting an understanding of how all that works and how the price goes up, each step of the way. It’s business and how most of the (so called) free market operates.
Recently I have paid more attention to the supermarket prices and it seems clear to me that all this talk of a “cost of living crisis” is probably just bullshit. Yes, most things have gone up in price. But these are artificial price hikes which they (if you know, you know) can get away with because they are constantly telling us that there is a “cost of living crisis”.
But there shouldn’t be any such thing. There is no reason for prices – especially for local produce – to be as high as they are. And below I present evidence that I believe clearly highlight the “cost of living crisis” scam for what it is.
Exhibit A – One tin of Chickpeas:
The price of this tin of processed imported chickpeas is $1.90 which comes in at $4.80 per kilo. And BPA Free too – whatever that means?! (I have no idea). These are produced, processed, canned and shipped from Italy.
There is another – even cheaper Woolworths ‘own branded’ – tin available for just $1. That equates to $2.40 per kilo. Those cheaper chickpeas are also from Italy.
For comparison, in the same shop, you can buy a 1 kg packet of dried chick peas for $3.70 – and those are Australian made (grown)! Not only are there cheaper imported alternatives but they are already cooked. So there is no (or little) additional cooking expense. Makes you think eh? All of those growing, processing, transport, handling, distribution costs and labour involved; yet still cheaper. Nuts! (Well, chickpeas in this case).
And yes, I do realise that factories buy fresh produce in bulk for canning (so therefore cheaper than we would pay in a market) but still… Isn’t the cost of transport meant to be very high these days? Fuel prices anyone? Or is all that inflation just for us plebs who have to put fuel in our cars?
Every link in that supply chain will be making a profit. They wouldn’t do it otherwise – or at least not for long. So: Where is this “cost of living crisis” coming from exactly?
Exhibit B – One tin of Italian Tomatoes (peeled even!):
Who doesn’t love Italian tomatoes eh? But these are a fraction of the cost of fresh tomatoes grown in Australia – according to what the supermarkets dictate. Another example of food being grown in another country, being processed, canned and then shipped to the far side of the planet. Then there is all the distribution by lorry/van and handling at warehouses. Somehow the cost is among the cheapest on the shelves. The price of that tin of tomatoes is $1.10 – which equates to $2.75 per kilo.
Meanwhile, the cost of fresh Australian grown tomatoes varies wildly – sometimes seasonal maybe, other times who knows? It can be anything between $12 to $18 per kilo. (You can check on any supermarket’s website.)
How is that possible? How the hell can (relatively) locally grown, fresh produced tomatoes cost at least 6 times as much? How can it be justified? Nobody will be taking a loss in all this. The canning factory will sell the tins on for profit. The shipping company will charge according to weight and size (as always) and the importers will charge the supermarket who then charges you/us. Everyone is getting a cut. The Italian farmer may be practically giving his tomatoes away in real terms, but must then surely be subsidised (probably with European Union grants – i.e. taxpayer’s money). Otherwise nobody would bother. Would they?
So tell me again please: Where is this “cost of living crisis” coming from really?
And now a personal favourite of mine…
Exhibit C – ‘Edge’ Razors, pack of 20:
Question: Who is old enough to remember John McEnroe when he was at the height of his tennis skills and also the height of his notoriety? If you remember those days then you will probably have seen McEnroe advertising those Bic razors. He was playing a game and the umpire made a call something like “that was a close shave Mr. McEnroe.” To which McEnroe yells out his reply (something like) “When I need a close shave you dick, I use Bic razors!” – close enough for this blog post… Classic McEnroe behaviour back then.
Anyway, the point is – and surely anyone who has used them will agree – Bic razors are really shit and rip half your face off. Guaranteed the worst shave you will ever have. Well that’s my opinion anyway and I’m sticking to it. But they still seem to be everywhere. Weird eh?
Incredibly these “Edge” razors cost only 22 cents (Australian) per twin blade razor as opposed to those crappy “cheap” Bic things which are 35 cents per twin razor. These “Edge” razors on the other hand, give a really good smooth shave. As good as anything I have used. So forget the expensive Wilkinson Sword and Gillette – which are extortionate by comparison – or even the garbage Bic razors. In the competitive market of shaving these razors are incredible value for money.
However, my point is what is on the reverse of the packet. It says this:
“Blades made in USA
Assembled in Mexico
Packed in China”
I kid you not! Then of course they need to be shipped to Australia, warehoused and distributed to your local supermarket. What!? Isn’t that crazy? Yet so much cheaper than even other well known “cheap” brands.
OK. Packaging in China may be damn cheap and assembly in Mexico could well be equally as cheap. These places have a plentiful supply of cheap labour right? But making the blades in the USA? Not so sure. Then of course there’s the logistics of that whole operation. Get them made, then shipped to the other side of the world (China) to be packed, then shipped on (again) to Australia. Double shipping costs! How the hell???
How can companies supply such good value when others are using the “cost of living crisis” to massively increase the cost of their goods? It’s a question you should all be asking your friendly local politician.
Top Tip: All you women out there should also be buying these value for money razors. They are not only for men – you know that right?
There are other examples but you get the point I hope. So..
Is there really a “cost of living crisis” or is it just made up to frighten people and for the news outlets to constantly harp on about? The chick pea and tomato farmers in Italy are no doubt also being told every day that there is a “cost of living crisis”. But do they know that their produce is being sold so cheaply on the far side of the world? What are they paying for similar produce in Italian supermarkets? (Other countries apply equally of course).
Undoubtedly a lot of products have shot up in price since the big “cost of living crisis” announcement. Why wouldn’t they? If the government tells everyone such a “crisis” exists many will jump on that bandwagon. Without fail. And put a huge increase on their prices. It’s a great opportunity to cash in. That’s capitalism I’m afraid…
The point is that many locally produced/grown products should cost almost nothing. These examples prove that. Or there is a lot that they (yes them again!) are not telling us…
So. I ask again:
Cost of living crisis? What cost of living crisis?
And yes. The title of this post is a nod to that great Supertramp album “Crisis? What Crisis?”
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