Greedflation? Research finds some brands are hiking prices higher than inflation, faster than others
Inflation may not be the only factor increasing the price of consumer goods, especially devices, new research by PriceSpy suggests.
PriceSpy tracks the cost of goods over time, showing consumers where to get the lowest prices.
Carl Lindholm, head of public relations for PriceSpy Aotearoa, said while inflation is often blamed for increasing prices, it’s not the only reason.
“We are increasingly seeing competing manufacturers up their prices at differing rates, not only to each other but in comparison to the rate of inflation,” Lindholm said.
Yes! Price gouging behaviour by price maker corporates operating in under-regulated capitalism are driving inflation, not worker wage demands!
NZ business are quick to pretend their price gouging isn’t generating greedflation…
Inflated company profit margins not a major factor in driving up prices in New Zealand – report
Inflated company profit margins, so-called greedflation, have not been a significant factor in driving up consumer prices, according to a new report.
Business NZ – a industry advocacy group – commissioned the report from economic consultancy Sense Partners, which concluded that input costs such as materials have been the major drivers of inflation.
The report said 75 percent of inflation for non-financial businesses over the past three years had been inputs with the balance evenly split between wages and profits.
…really?
…I believe this claim by Corporations that their price gouging isn’t causing inflation is nothing more than PR spin.
First it leaves out the ‘Financial sector’ category of business because – ‘Financial firms require more complex analysis, as the volume of services consumed is not conceptually the same, which is outside the scope of this paper.’ (Under heading 1. Profit-driven inflation approach).
The second major omission is the report ignores the structure/makeup of the New Zealand business environment; it is dominated by franchises, the most obvious are Starbucks/MacDonalds/KFC etc
A third factor is the report uses averages of profit margins from 2017 to 2022 to show pre and post covid profit margins. Averages – there are hundreds of business in New Zealand, many are franchises (I just explained how profits are stripped out), that are lean and hard working. These small businesses have relatively low levels of profitability. There numbers will pull down the average for the few central owner companies who could well be undertaking greedflation but the lack of granularity in this report means we simply can’t see the greedflation on this level of data.
…the issue regarding Greedflation is that price makers who enjoy under regulated market conditions can force us to take any price.
We see this in the Supermarket Duopoly, the Banking Oligopoly and Construction monopolies!
As the brilliant Professor Wayne Hope points out…
Inflation today does not have monetary causes and monetarist solutions cannot work. Edward Miller, economic researcher for FIRST UNION, cites a US Federal Reserve study which debunks the Phillips Curve. Organised labour’s declining bargaining power weakens the relation between unemployment and inflation. Wage-push inflation growth is just not there, so why contract the economy? In New Zealand, between 1991 and 2023, union density declined from over 50 to 20% of the workforce. Clearly, today’s stunted, uneven wage growth is not going to trigger an inflationary surge. Emeritus economics professor Tim Hazeldine proposes a more plausible diagnosis:
It’s COVID inflation that was driven by a supply push from the pricing side of the market. The initial transportation logjams caused by lockdowns gave shippers—especially container shippers—the excuse to drastically hike their prices. In the confusion, many other sellers of many other products discovered that they suddenly had, as one analyst put it, ‘real pricing power’. And boy did they use it!
International research points in the same direction. For US economists Isabella Weber and Evan Wasner, evidence acknowledged by US and European central bankers indicates that “price setting by firms with market power drive inflation”. Giant corporations have the product portfolios, dominant market positions and revenue management systems to maintain margins and customers. With global reach, they are less dependent on any single national market and can shape prices. By contrast, small businesses cannot easily raise prices as costs go up and interest rate repayments increase. Creditworthiness and access to loans will therefore diminish.
Sound familiar? As Tim Hazledine would attest, supermarkets, power companies and banks are pricemakers who drive up inflation while the rest of us struggle. Most obviously, the four largest Australian banks in New Zealand collectively made over NZ$6 billion in 2022. They exploit, ruthlessly, the margins between the interest rates of wholesale money for them and the mortgage rates for captive homeowners.
…look, inflation lowered in our last quarter because of softening oil prices caused by Biden tapping the US strategic oil reserves. OPEC responded to Biden with cuts which take effect next month on top of the 25cent fuel subsidy relief coming off, on top of unprecedented 100 000 migrants on top of food supply problems impacted by the recent cyclone damage to our horticultural industry – Orr is driving the Economy off an inflationary cliff and daring Grant Robertson to take the wheel!
Orr is saying monetarism can only go so far and that the Government must use fiscal tools like raising tax to sort this out!
Price gouging corporations who have used their under regulated market dominance to milk obscene profits from NZ and are now pretending they aren’t causing Greedflation and that it’s all then workers fault for demanding more wages.
UK just raised their OCR by .5, Australia also raised and the Fed have warned of two more rises.
In NZ, the Reserve Bank Governor is playing chicken with Treasury seeing who will blink first, Monetarism or Fiscal policy.
Month by month the economic house of cards gets more unstable and the rich who have benefited most keep tricking you into believing taxing them isn’t the solution, when it is.
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Martyn – Again, great stuff…so where is the Government on this, in terms of actual actions…not working groups.
working groups pay well though
Reactionary Bratwurst – So true
This Government are bereft of ideas,have no ideas,hence consultants.
Right wing think tanks pay better though
The reserve bank looks increasingly like a group of economists tied in to their paradigm of the last twenty years and unable to see that what they are doing might mess with the housing market a bit but does nothing at all to deal with inflation. They are causing mortgage pain whilst the average person struggles with that and the cost of food. Tax is not the answer Martyn as tax is just more money to a wasteful government. We need fiscal policy that deals with the banking sector profit shifting out to Australia and the power companies who rig the ever increasing power prices and destroy the smaller independents trying to give us choices (Labour came in to power on this but did nothing)
Speaking of greed, just waiting for the government to smash us with the 30 cents per litre tax gouge come July. Boom, thanks for playing! Cost of living issues, who cares!
Its all down to what shows up in the polls this week!!
Wouldnt put it past the Chipkins to tell the electorate that they thought they’d be kind and extend the petrol rebate until the end of October because of cost of living, you know. Depends on whether they can get another Talbot Mills type result through this week.
The Sense Partners report on greedflation is a good read.
TDB is a great source for information.
Once you read it here go and do your parallel research and one learns a lot.
One factor that “I” haven’t seen discussed is the fact the debt is untaxed.
I really do hate thinking about negative interest rates.
All billionaires do it. They don’t draw income. They borrow against there assets and post it as a loss then take the difference and put it into there pocket. Now I don’t really have a problem with someone like Elon or Jeff Bezos doing that because they are actually coloberating and building stuff. Remind me what bankers do? Of that’s right theyre really good at figuring out how to pickpocket everyone. That’s what happened in the 2008 financial crises and that’s what negative rates are. The public pays for non productive ideas. You don’t see Elon or Jeff going in with a tin cup.
Price rises are driven mainly by domestic inflation,direct result of poor financial governance by the Labour Government.
And the only ones who could actually do something about urban [greedflation] are the ones who supply the goods for next to nothing for you to get greedy over. But they’re too busy wandering around their cold winter paddocks with a look of defeat and desperation on their faces. I nearly wrote faeces.
‘Cough-cough’. Just because everyone tells you, you’re powerless and frankly a bit pointless and useless, you’re not. I know! Face-fanning while who-knewing !
In Invercargill the best vegetables ( Spray free.) are to be had at the Sunday morning market underneath a draughty veranda outside the now deserted but frankly bloody funky railway station. You have to get their early because by about 10 AM the vegetables etc are gone. Then, if you’ve missed out one must go to the criminal duopoly New World and Countdown cartel to see the real-men prices for chemical laden veggies trucked down from the North Island and likely beyond.
Farmers? You could do something about that, you do know that right? In fact, you’ve the only ones who could do something about that. Try boycotting the supermarket cartels for a start and encourage direct to the eaters of vegetables to buy directly from you? Ok. So that farmers bestie, the Big Bwave Jonky, made vegetable seeds a licensed substance but here’s how you get around that one. Is easy. Take note?
Firstly, make a fist. Two fists is preferable. Then, raise that fist/s and extend the second finger from the pinky or more commonly known as the middle finger if one were to regard the thumb as a finger. Now, point that finger/s upwards and towards your target audience and say this. FUCK YOU, JONKY! FUCK YOU, COUNCILS ! FUCK YOU, GUBBIMINT ! FUCK YOU, YOU * ‘WET, WHINY’ TOWNIES, FUCK YOU, LUXON ! FUCK YOU, HIPKINS because you’re an unrepentant neo-liberal wearing old moth-eaten scruffy Labour’s skin, so indeed… FUCK YOU !
RNZ
National Party leader Christopher Luxon has described New Zealand as a “very negative, wet, whiny, inward-looking” place.
*https://www.rnz.co.nz/national/programmes/morningreport/audio/2018894298/is-nz-a-negative-wet-whiny-inward-looking-place
RNZ
New Zealand the best country in the world but it needs to get its mojo back, Luxon says
Despite saying New Zealand is negative and whiny, the opposition leader says he believes it is the best country in the world.
https://www.rnz.co.nz/news/political/491955/new-zealand-the-best-country-in-the-world-but-it-needs-to-get-its-mojo-back-luxon-says
“…its mojo back”
National fucked, and are still fucking our *farmers. National doesn’t care about city people because city people don’t have the vast amounts of money the natzo’s must swindle on an on-going basis. Weirdly though, they must have the city vote to stay in a position unquestioning authority which is while National have their hands in farmers pocketsesssssss they must demonise farmers to the city populations…. where the votes are.
14 multi-billionaires, 3118 multi-millionaires then the four foreign owned banks stealing $180.00 a second in NET profits are what neoliberalism gave AO/NZ. And nothing’s changed.
Royal commission of Inquiry. Now. Today. Before they sell us, land and all, to some rich Chinese wonton manufacturer.
I nearly forgot inward-looking. Ah..? The most advanced farmers in the world driving an agricultural environment second to none, again, in the world. ( Yet always seem exhausted. Luxon? Perhaps you can explain? ) Heard of the Hamilton Jet Boat? How about Burt Munro who’s speed record still stands, I lived next door to the Christchurch surgeon who pioneered kidney transplants. Heard of John Britten Baldylocks? Or Cock-head. Either will do. Ed Hillary? How about jonky’s bestie, Pete Jackson? Speaking of Peter’s, Sir Peter Blake? How about Richard Pearce? How about me, you fuck? And then there’s me and my mum, my dad and my aunt who farmed 3000 acres running 5000 sheep and 300 Black Poles. ( Angus ) We rarely broke even while Auckland was busy building multi-billionaires as roger sold us and the infrastructure we built out to four foreign owned banks by way of GST on consumers and volatile interest rates @up to 22% and the fiiiiine gentlemen who, without lifting a finger found themselves within the global richest individuals club of 200.
If I could find a wishing fairy, they’re more rare than you’d think, I’d ask him/her to be put me in front of you and you could tell me again how “…very negative, wet, whiny, [and] inward-looking” we are. We farmers and city people need National and ACT like a double dose of fucking Round Up.
A public, Royal Commission of Inquiry please ?
Just to clarify, isn’t the government reducing the surtaxe? So is it a gouge?
This government has been MIA on greedflation. A few lines about the duopoly, but nothing substantive – all they really care about is identity politics.