Monday, February 20, 2017
213 What is the South African position on resale price maintenance?
For example, consider resale price maintenance. If a
manufacturer drops a retailer who discounts its product,
but reinstates the retailer if he promises to charge the
suggested price in the future, that is an illegal conspiracy.
If the manufacturer promises to forever cut off any retailer
who discounts its product, there is no conspiracy, so this
is legal.
Sunday, February 19, 2017
Saturday, February 18, 2017
211 Study skills
YOUR ACADEMIC AND CAREER SUCCESS SITE!
Visit
MyCollegeSuccessStory.com -- a comprehensive academic success site
for college-bound and current college students, with free advice, tips,
and tools to help you achieve greater success in college!
Thursday, February 16, 2017
209 CHICKEN IS NOT CHICKEN (or a flower is not its stem)
CHICKEN IS NOT CHICKEN (or a flower is
not its stem)
FairTrade said:
“This is simply not true. South
African producers are highly efficient. Imported thigh and leg portions arrive
in SA at below their cost of production. This is DUMPING - the export of a
product at a price lower than the price charged in its home market, or below
its cost of production.
According to international trade rules it is ILLEGAL. The chart shows that the production price for EU chicken in 2013 was about 1.75 Euros per kilogram. It equates to roughly R25 per kg after adding in a 10% cut up factor for chicken pieces.
The average import price for EU chicken into South Africa in 2016 was roughly R15.
That means that, EU producers have been selling chicken pieces at a price in SA roughly 60% lower than their cost of production. This is DUMPING!”
According to international trade rules it is ILLEGAL. The chart shows that the production price for EU chicken in 2013 was about 1.75 Euros per kilogram. It equates to roughly R25 per kg after adding in a 10% cut up factor for chicken pieces.
The average import price for EU chicken into South Africa in 2016 was roughly R15.
That means that, EU producers have been selling chicken pieces at a price in SA roughly 60% lower than their cost of production. This is DUMPING!”
Francois Baird does not seem to
understand economics and product costing.
Let me put it into simple terms – in the
form of a story for kids.
Eloise studied science and biology at
school and developed a new flower that she called Dahlilies She started farming
these beautiful flowers – the business grew and thousands and thousands were
sold on the local and international markets. Then an interesting thing happened
– in Atlasia, a neigbouring country, there was a huge industry – they planted and
harvested onions that were used in all the dishesand food products in the country
as well as soup.
However, some shrewd entrepreneurs in Atlasia realized that the stems of the Dahlily were a perfect replacement for onions…!!!
However, some shrewd entrepreneurs in Atlasia realized that the stems of the Dahlily were a perfect replacement for onions…!!!
The entrepreneurs contacted Eloise and
Eloise started exporting Dahlily stems to Atlasia – essentially for the cost of
transport plus a little bit. She already made superprofits from selling the
flower – the stems were essentially waste!.
The onion producers (and unions) in
Atlasia were not happy at all.
The consumers in Atlasia were happy –
they now were able to afford all their meals at half price! - their cost of
living went down dramatically! They were able to afford to buy clothes and send
their children to private schools without even asking for a salary increase. In
fact some were able to live so cheaply now that they did not ask for an
increase when the time came - This made the bosses and factory owners happy –
because the things that they produced could now be exported competitively to
other countries. Employees in these factories could also now be paid more
because of the newfound prosperity.
The onion producers and the few union
employees were not happy and lobbied government to introduce and import tax so
that they could compete against what they called the “unfair” competition. The
government however were a liberal government that understood that they should
not intervene to favour the interests of one group over the interests on
another group. In any event the benefits to the country was huge.
FOR THE PARENTS
FOR THE PARENTS
The cost of production the
chicken legs (brown meat) is close to nil and should not be allocated the way
that Francois Baird does in the graph. It may achieve his purpose, but is not correct. Just
as the flower and stem is not the same product so is white and brown meat not the
same product. In this case it seems to be a pure business reality and therefore no government involvement should be sought.
Saturday, February 11, 2017
Subscribe to:
Posts (Atom)