Saturday, February 16, 2013

Horses, regulations, and human self preservation

So picture this. You get home with your brand new INSERT (car / television / computer / set-top box / new mobile phone / groceries / clothes / et cetera), and you rip open whatever packaging that came with your purchase. You have to know that the packaging, though plastered with whatever the brand of whatever you bought, does not necessarily mean that they made what you bought. It is, more often than not, entirely made by a third party. You're now a proud new owner of whatever you just bought.

Now, lets go back to just before you made that purchase. You would definitely have considered price, and as with most of our purchases, we look for the best that our money can get us. Now this is where the real demand comes from. It is no longer as simple as brand loyalty as with what used to be, simply because, with technological advances aplenty, I am speculating that the average consumer would, at many times, just be comparing a specification sheet.When there are basically only a few producers in the world (and I am not talking tier one suppliers like blackberry or apple),  the pressure for lowered production costs does not effectively come from the consumers, but rather, from the tier one and two suppliers.

Now, what happens when say, you buy anything? That something would be already be on a shelf, and for that to happen, someone somewhere would have said - I want to sell a _______ at $______. Then, someone would say that I can make this at $_____. The first guy would think about how much money he can earn, and then this whole project would either start or not. This is a simple model, but this is exactly what is happening that makes horse meat end up in burgers, and clothes from big brands originating from sweat shops.

Simply put, do we really care about the process of where our products come from? Do we still care that the poor guys are working themselves silly to be able to produce some meat to sell as burgers don't have food themselves?

Yes. I have been there. I have walked into Tesco's and bought a toaster oven for Eur 12, instead of a non generic brand for more than 5 times more. Did I get a good deal? Yes. Can I be sure that by my purchase, I am not encouraging a company in exploiting an unsustainable work force?

And now that you have read this, you may be thinking that you should not be buying the cheapest. But you have to know that though you may always stick to the big brands, I am sure that it does not translate to the happy production lines of the north pole.

Do I have a suggestion? No. All I know is that when you take a product, and cut out all the middlemen, selling straight from factories to consumers, you start a war. A price war that impacts all the middlemen. When middlemen struggle for survival, the smaller manufacturers suffer. When the manufacturers struggle for survival, you get odd meats in your burgers, amongst others. This is not a new story. Is there anything we can do to stop this? No. Definitely not. I am just really wondering as to where this is headed.