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Coffee retailing is dominated by a small number of very large corporations selling a range of heavily branded products. Despite the wholesale price has dropped, the retail price stay high, meaning mass industry profits.
Member rating: No Rating | Words: | Submitted: Mon Jun 19 2006
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Coffee retailing is dominated by a small number of very large corporations selling a range of heavily branded products. Despite the wholesale price has dropped, the retail price stay high, meaning mass industry profits. The big four coffee roasters, Kraft, Nestle Procter & Gamble, and Sara Lee, each have coffee brands worth US$1bn or more in annual sales. Together with German giant Tchibo, they buy almost half the world's coffee beans each year. The key factor supporting prices is monopoly control of supply. The wholesale price is currently at the lowest level for 35 years. Price on world markets, which averaged around 120 US cents/lb in the 1980s, is now around 50 cents. This price collapses left million of coffee farmers destitute and forced to sell their coffee below the cost of production. Farmers are powerless to influence the price and are simply price-takers. They have no choice but to...
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