Revealed: Top US Corporations Raising Prices on Americans Even as Profits Surge

[eissa]

Source: Guardian

"Media framing likely influences public perception. News reports of Hershey’s multiple price hikes over the last year read like so many dire reports on inflation’s pervasive toll. The company, which owns popular brands like Reese’s, KitKat and Skinny Pop, has been cast as the 'latest victim of ever-increasing inflation.' But a closer look at the company’s financials suggests a vastly different reality. Hershey’s net profits spiked 62% between the fourth quarters in 2019 and 2021, its operating margin widened, and it recently rewarded shareholders with $200m in stock buybacks."

Read more: https://www.theguardian.com/business/2022/apr/27/inflation-corporate-america-increased-prices-profits?utm_term=6269293bdbd7fd143187b774a9de98c4&utm_campaign=GuardianTodayUS&utm_source=esp&utm_medium=Email&CMP=GTUS_email&fbclid=IwAR2qgvQsYhQUPvvpz3xyIrPsCcSRdoPSaYVBH6X2c_Cdniut0h49rClTFjM

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This is needs to be repeated ad nauseum - there is no inflation, we are being price-gouged by greedy corporations profiteering off a post-pandemic world.

[KPN]

1. It has been repeated ad nauseum to little effect. It is what it is ... uninformed but misinformed

public perception which translates into voter perception. So yeah, we need to keep setting the record straight. Frankly, elected Democrats need to start doing this loudly and clearly. Will it affect campaign fund raising, probably yes and maybe in a negative way, but we aren't going to beat the "inflation" fear-mongering without taking it head on. Time to call out corporations for fleecing consumers via the inflation facade.

[Achilleaze]

2. "What's good for grifters is good for grifters." - Republicans

[Pantagruel]

3. There is some legitimate inflation

Has to be with Crude at $100 and supply chain disruptions caused by both the pandemic response and war. But you're right, corporations are taking advantage of consumers using the excuses above to profiteer.

[world wide wally]

14. Even with oil at $100/barrel, that does not require an increase in the

refining, or shipping costs. Or any other cost actually.

[mahatmakanejeeves]

21. Where do you live that shipping and refining don't require any energy?

Even with oil at $100/barrel, that does not require an increase in the

refining, or shipping costs. Or any other cost actually.

[world wide wally]

23. I didn't say "any energy" I said "more"

It costs the same to deliver 1000 gallons as it does 100.

[mahatmakanejeeves]

26. Where does moving ten times as much product not require an increase in expense?

Last edited Wed Apr 27, 2022, 04:25 PM - Edit history (8)

All I can think of is floating logs down a river maybe, but that practice went out decades ago.

If you're talking about moving refined product in a pipeline, it certainly requires more energy to move 1,000 units of product than it does to move 100 units. Further, the energy you use to move that product costs more than before, if crude oil is priced at $100 per barrel now, when it used to be priced at, say, $40 per barrel.

Not a pipeline? Let's try something else. You're CSX or Norfolk Southern, and you're moving automobiles from a factory to an automotive distribution center. Three hundred miles sounds about right. You've got 720 cars to move. An autorack holds 12 cars. That's one 60-car train. Put two 3,000 horsepower diesel locomotives on the front. Average train speed, 30 mph end to end. That's ten hours. I don't know how many miles per gallon they get, but someone on the railroad will know the expense for moving a 60-car train carrying 720 automobiles 300 miles using two 3,000 locomotives to get the job done.

That was then; this is now. Business is up tenfold. Now you have to move 7,200 automobiles. Same distance, but let's increase the train length to 75 cars. This can still be done with two locomotives per train.

600 autoracks in 75-car trains means you'll have 8 trains. You'll need more locomotives.

Train weight has gone up by 25 percent. The increased weight per train means that the locomotives will be working harder, thus getting worse mileage. The trains will slow down too and take longer for the trip. Trains headed in the opposite direction will have to take the siding more, so operations for all trains will slow down along the segment of track over which the trains are operating.

You can speed the trains up, but only by adding a third locomotive. That means more fuel, but now it costs more than it did back when the factory had orders for only 720 automobiles. It's up to $100 per barrel now. What that works out to per gallon of diesel fuel, I don't know.

You'll need an engineer and a brakeman per train, depending on the contract. The train crews will probably want to be paid too.

Any delays? Whoops, you'll need a second crew, as the first crew runs out of hours and ties up the train at the nearest point where it can. Call a taxi and take the crew to a terminal. You'll need only one taxi; the new crew can ride in it on the one to the tied-up train.

The railroad can figure out the cost for doing this, but it's certainly going to be a lot more than for the first movement of automobiles.

Every step of the operation costs more now than it used to.

I believe I am using realistic figures.

[mathematic]

33. You think refinery workers and petroleum truck drivers work for 2016 wages?

Because they don't.

[world wide wally]

34. Take a deep breath.

Are you saying that if we have more oil, the price has to go up because refinery workers and truck drivers have more work to do?
I kinda figured that one out already.

[Skittles]

31. yes but inflation is 7%

and prices for items are up 25%, 50% or even DOUBLE, there's some serious bullshit going on

[Zeitghost]

38. That is impossible

7% Inflation means that on average across all sectors, prices are up 7%. Some individual items or sectors might be up drastically, others might even be down and they average to 7%.

[IronLionZion]

4. As long as idiots blame Biden

these grifters will be laughing all the way to the bank. Watch for share buybacks as stock prices get lower.

When the fed raises rates next week, they will use that as an excuse for something.

[calimary]

11. Yep!

[groundloop]

15. What's that they say.... let no crisis be wasted.

[ck4829]

45. Indeed

[turbinetree]

6. Now how much taxes did they pay compared to the average person....

in some cases zilch, nada, zero.......there once was a time when the rich paid 90% in taxes.

And to add further insult I need to get a new air conditioner mine is 25 years old and uses old freon, and that costs a lot of money to service in the unit....just got word back from the "guy" that installed my new heater that prices for the air conditioning unit will be going up 50% more in price...... .

[Fiendish Thingy]

7. The fact that every mention of inflation doesn't include this info is media dereliction of duty. Nt

[twodogsbarking]

8. In a related story. More people living in poverty.

[dchill]

9. Grabbing all those $15 an hour raises.

Low-hanging fruit for greedy con corporates.

[Historic NY]

10. Sucking the life blood from everyday Americans one dollar at a time...

[Hoyt]

12. "Price gouging" could be responsible for some, but yes there is inflation. Call it a hoax

at our own peril.

[brooklynite]

13. Corporate greed and inflation are not mutually exclusive.

Blame CEOs all you want; The Biden Administration will take voter blame for inflation.

[rockfordfile]

16. Majority of Americans get it that price gouging is occurring.

[Skittles]

41. do the majority of voters

[ToxMarz]

17. Just from a business perspective, without moral/ethical concerns

a corporation would be foolish not to raise prices, even negligent if publicly traded. They have been given the green light by the media and complete cover and impunity. Duh! They live and die by the numbers, the numbers say YES!!!

[nuxvomica]

18. Someone here suggested the term "Greedflation"

I think it's got legs, as they say.

[ck4829]

46. I like that

[multigraincracker]

19. Capitalism has nothing to do with supply and demand.

It is based on what the market will bear. When we stop buying, the price comes down.

[mahatmakanejeeves]

28. "Capitalism has nothing to do with supply and demand."

Capitalism has nothing to do with supply and demand.

It is based on what the market will bear. When we stop buying, the price comes down.

When people stop buying, that's a decrease in D[]MAND.

Want to buy a vowel?

[multigraincracker]

29. I don't see the supply in that formula.

Replace supply with speculation. In the last year the supply of gasoline has remained the same. The fear of war is the only change. When Russia entered Ukraine, the price jumped. No change in supply or demand. Price went up almost a buck. The fear of less oil(what the market Would bear)jumped up.

[mahatmakanejeeves]

30. The oil market is not something I ordinarily follow on a day-to-day basis.

These guys look as if they are top of things.

Thanks for writing. You're making me look this up. In the words of Martha Stewart, that's a good thing.

You have to subscribe to get the .pdf download. That will set you back a mere € 2,850. And that's a US comma delimiter, not a European comma delimiter.

Oil Market Report - March 2022
Part of Oil Market Report
Fuel report — March 2022
03 March

This is an extract, full report available as PDF download

About this report

The IEA Oil Market Report (OMR) is one of the world's most authoritative and timely sources of data, forecasts and analysis on the global oil market – including detailed statistics and commentary on oil supply, demand, inventories, prices and refining activity, as well as oil trade for IEA and selected non-IEA countries.

Highlights

• Surging commodity prices and international sanctions levied against Russia following its invasion of Ukraine are expected to appreciably depress global economic growth. As a result, we have revised down our forecast for world oil demand by 1.3 mb/d for 2Q22-4Q22, resulting in 950 kb/d slower growth for 2022 on average. Total demand is now projected at 99.7 mb/d in 2022, an increase of 2.1 mb/d from 2021.

• The prospect of large-scale disruptions to Russian oil production is threatening to create a global oil supply shock. We estimate that from April, 3 mb/d of Russian oil output could be shut in as sanctions take hold and buyers shun exports. OPEC+ is, for now, sticking to its agreement to increase supply by modest monthly amounts. Only Saudi Arabia and the UAE hold substantial spare capacity that could immediately help to offset a Russian shortfall.

• Global refinery throughput estimates for 2022 have been revised down by 860 kb/d since last month’s Report as a 1.1 mb/d reduction in Russian runs is not expected to be fully offset by increases elsewhere. In 2022, refinery intake globally is projected to rise by 2.9 mb/d year-on-year to 80.8 mb/d. Despite a downgrade to demand, product markets remain tight with further stock draws expected throughout the year.

• OECD total industry stocks were drawn down by 22.1 mb in January. At 2 621 mb, inventories were 335.6 mb below the 2017-2021 average and at their lowest level since April 2014. Industry stocks covered 57.2 days of forward demand, down by 13.6 days from a year earlier. Preliminary data for the US, Europe and Japan indicate that industry stocks decreased by a further 29.8 mb in February.

• As this Report went to print, ICE Brent oil futures slid to around $100/bbl after touching an intraday high of nearly $140/bbl on 8 March. Prices jumped from $90/bbl in early February following the invasion of Ukraine and as supply concerns mounted. Prices have eased again on economic concerns, surging Covid cases in China and traders reducing positions due to extreme volatility.

{snip}

On to the April report. I'm not sure how to interpret this: "Global oil supply rose in March ..." but "Global oil inventories have decreased for 14 consecutive months ..."

Anyone?

Oil Market Report - April 2022

Flagship report — April 2022

About this report

The IEA Oil Market Report (OMR) is one of the world's most authoritative and timely sources of data, forecasts and analysis on the global oil market – including detailed statistics and commentary on oil supply, demand, inventories, prices and refining activity, as well as oil trade for IEA and selected non-IEA countries.

Highlights

Severe new lockdown measures amid surging Covid cases in China have led to a downward revision in our expectations for global oil demand in 2Q22 and for the year as a whole. Weaker-than-expected demand in OECD countries at the start of the year added to the decline. As a result, our estimate for global oil demand has been lowered by 260 kb/d for the year versus last month’s Report, and demand is now expected to average 99.4 mb/d in 2022, up by 1.9 mb/d from 2021.

• Global oil supply rose in March by 450 kb/d to 99.1 mb/d, led by non-OPEC+. Russian oil supply is expected to fall by 1.5 mb/d in April, with shut-ins projected to accelerate to around 3 mb/d from May. Despite the disruption to Russian oil supplies, lower demand expectations, steady output increases from OPEC+ members along with the US and other non OPEC+ countries, and massive stock releases from IEA member countries should prevent a sharp deficit from developing.

• Global refinery throughputs are forecast to increase by 4.4 mb/d from April to August due to new capacity and normal seasonal gains. This would allow product inventories to see the first build in two years, offering some respite to the tight market. Overall, 2022 runs are forecast to gain 3 mb/d y-o-y, but will remain below 2017 levels.

• Global oil inventories have decreased for 14 consecutive months, with February stocks 714 mb below the end-2020 level and OECD countries accounting for 70% of the decline. OECD total industry stocks fell by 42.2 mb to 2 611 mb in February, nearly double the seasonal trend. Preliminary data show a build in OECD industry stocks of 8.8 mb for March.

• Futures prices for ICE Brent were trading at around $104/bbl as this Report went to print, down nearly $10/bbl following IEA collective stock release actions and a massive US release from the strategic petroleum reserve. Benchmark crude prices are now back to near pre-invasion levels but remain troublingly high and are a serious threat for the global economic outlook.

{snip}

[mahatmakanejeeves]

32. The IEA report aside, there's this:

I am not a commodities buyer for an airline, or a railroad, or a firm that operates intercontinental container ships.

I believe that buying fuel is like buying an airline ticket. If you walk up to the counter at the last minute, you are guaranteed to get the worse price.

Instead, you buy ahead of time and lock in a contracted price. You have to hope that your economists are able to estimate what the price is going to be in three months or six months or a year from, and negotiate your contracts with the suppliers accordingly.

If your economists are good at estimating, you make money. If your economists make a boo-boo, you go bankrupt.

Anybody can tell you what it costs today. It's the predicting that's the hard part.

You do the best you can. Sometimes you get the bear; sometimes the bear gets you.

Thanks for writing.

[multigraincracker]

35. Users, like airlines and railroads use to

Balance the highs and lows in the futures markets and it worked out well for them. They had the storage to take delivery. That all changed some years ago and the future markets were opened up to investors that were not end users and no storage. It turned into a casino with bets placed.

The Father of Capitalism, Adam Smith, in his book Wealth of Nations thought markets were able to balance prices with the laws of supply and demand. He also thought markets needed regulations to prevent monopolies that would manipulate the markets. Along came neoliberal economics and did away with regulations. Banks, energy and other businesses consolidated to bring about today’s monopolies and what we are now living with.

Just my opinion.

[KY_EnviroGuy]

20. A vast right-wing conspiracy, I tell you.*

* HRC, 1998.

Not just here, it's global and it's social, economic and political in scope.

KY..........

[jaxexpat]

22. Laws written over the last 4 decades have steadily moderated the risks inherent in businesses.

For the holding companies of established multinational corporations there is essentially no risk their profits will decline. It's not important, actually, whether they make money or not. Piratization, cannibalization and simply selling off losers is relatively painless when the game is fixed. Only incompetent criminals like Trump can actually fail at business in this era of corporate mollycoddling by federal regulatory agencies (and, incidentally, a FBI, IRS, US Marshals, DOJ service that has been defunded and/or compromised into castratiland). It's been engineered that way in concert with "A list" denizens' tendency to forfeit control of our most essential commodities to the vagaries of 21st century monopolies. But that's another tier in the story.

Unfortunately for consumers, as people hear dire warnings from the mainstream media and drown in a ghostly self-perpetuating panic incubated on social media, they're almost obligated to fear "inflation". So, if the public is ignorant and disinterested in the fundamentals of the current economic situation and really can't be bothered to get informed beyond their "daily Facebook/Twitter briefing", is it a surprise that corporate profits surge with every uptick in popular panic?

People don't know, and haven't for a while, that the only thing the "masters of the world" fear is informed populations. Especially when they act en masse to reject corporate greed with their purchasing powers. But, BTW, popular reformists beware. The "masters of the world", the "A list" denizens', have a very deep-pocketed war chest with which to punish those who dare try their patience. It's almost as if, while we were sleeping, reasonable government was replaced by petty tyrant robots with top-notch accounting staffs.

The Book of Bartcop, Chapter 1, verse 1: If a mistake profits an entity, expect that entity to reproduce that mistake again and again etc.

[aggiesal]

24. This for crappy Mexican (Not really Mexican) food. ...

Chipotle
+86% profit growth
Q4 2019 to Q4 2021

“We’re pretty fortunate with the pricing power we have ... so we have more room to take the price as we need to. We see no resistance to date with the levels that we're currently at.”


Brian Niccol, CEO
Source: Q4 2021 earnings call

[Model35mech]

25. That was the pattern of stagflation back during the Nixon administration

Inflation is supposedly a consumer demand driven process.

But I came to appreciate that price raising in the absence of an expanding economy is basically greed.

[AlexSFCA]

27. profit is not inflation, when demand is high, prices will rise regardless of profit

it’s a little concept known as market economy

[roamer65]

36. Simple questions that were asked a lot from 1939-1945, during World War II.

Do I really need that item?

Do I really need to make that trip?

“If you ride alone, you ride with Hitler.”

If people get serious about cutting their unnecessary spending, prices will drop. But I don’t see that happening yet.

I think we do need to start consider rationing fossil fuels, as it would start to get carbon emissions under control. Climate change is a far worse crisis than WW2 and warrants rationing MUCH more.

[MichMan]

42. Is there a politician out there that is going to run on instituting gasoline rationing?

[roamer65]

43. Of course not.

We all know the answer to that question…LOL.

It will be answered after the fact, when it’s too late.

[LudwigPastorius]

37. Yep, they're all yanking our supply chain.

They're making out like bandits, and working to get the fascist party back firmly in charge.

[Deminpenn]

39. FTR, Hershey's is unique in that the entire company

is a trust for the benefit of the The Milton Hershey school in Hershey, PA.

Awhile ago, there was a case in PA Orphan's Court about whether or not the company should be sold in order to give the most benefit to the school or something like that.

https://csnews.com/hershey-trust-halts-sale

[XacerbatedDem]

40. NPR has an interesting conversation on inflation.

"This is what was happening 40 years ago, the last time inflation was this high."

https://www.npr.org/2022/02/13/1080464204/this-is-what-was-happening-40-years-ago-the-last-time-inflation-was-this-high

They seem to come to the conclusion that this time, inflation isn't so bad. I just remember that last time this happened, prices went up, but they never came back down.

[ck4829]

44. K&R