Tuesday, 6 December 2011

Fluff: Keep An Eye On The Price Of Oreos

When Kraft bought Cadburys a while back, three things were obvious.

1. UK jobs would be lost.
2. Kraft would make promises not to make redundancies and close factories.
3. They would break every single one of those promises five minutes later, which they did.

It continues with Kraft just announcing they're cutting 200 jobs, which is bad news. But it is bad news in a 'good news sandwich' where the bad is announced in between two items of good news. The good news being that they are investing more money in improving stuff like productivity, energy efficiency, reduce waste and some other corporate-speak gibberish to convince us they are aliens. I'm not sure how productivity is increased by cutting staff numbers, unless they make the remaining payroll work more or they change the Cadburys recipes and methods and make them naff.

But the other bit of good news is this: Oreos will be made in Britain for the first time. The ones you've seen so far have been imported from somewhere, adding an extra cost. A packet cost 89p before the recession but now range from 99p to 119p. I expect that without the import costs, the price should come down once shops start stocking UK-made Oreos. But what are the chances? Will Kraft gobble up the savings for themselves or pass them on to Oreo munchers?

I'm going to make a prediction: yes. The price of Oreos will not go down at all and may even go up. Oreos will demonstrate why 'trickle down' economics do not work.

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