Originally Posted by Somner:
“Tesco destroyed the dairy farmers. They paid normal prices for the milk but sold it at a loss to themselves. They did this with many products. In the end they killed off most of their competition and all of a sudden the dairy farmers (and other suppliers) found that Tesco were by far their biggest customer.
Tesco then demanded ridiculously low prices. If a farmer said no then Tesco would go to the next supplier, who would be more than happy for more business because they would be getting ripped off by Tesco anyway! In theory all of the UK dairy farmers could come together and agree to set a minimum price and that none of them would supply Tesco for less. The result? Tesco will import their milk instead.
Who says that Tesco do not have a monopoly?”
“Tesco destroyed the dairy farmers. They paid normal prices for the milk but sold it at a loss to themselves. They did this with many products. In the end they killed off most of their competition and all of a sudden the dairy farmers (and other suppliers) found that Tesco were by far their biggest customer.
Tesco then demanded ridiculously low prices. If a farmer said no then Tesco would go to the next supplier, who would be more than happy for more business because they would be getting ripped off by Tesco anyway! In theory all of the UK dairy farmers could come together and agree to set a minimum price and that none of them would supply Tesco for less. The result? Tesco will import their milk instead.
Who says that Tesco do not have a monopoly?”
Me because Tesco's not the only buyer of milk, other supermarkets are to blame as well. Also learn the meaning of a monopoly.
If all dairy famers were to collude together (forming a cartel) over milk prices then they are breaking the law under comp rules currently in the uk and prices would be passed onto the consumers, and not in a good way. The only way they can break even is by government subs.
