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Saturday, July 26, 2008

McCoke doing the public a favor

Prices for food related commodities including grains, vegetables, and meat have been going straight up like an F-22 doing a demo at an air show. Consequently, food and beverage peddlers have been a) either raising prices to offset their cost increases, and/or b) shrinking the package sizes but keeping the price unchanged, i.e. lowering their cost per package and recovering the margin. While the paying public might feel that its goose has been cooked, perhaps McDonald's and Coca Cola are doing their customers a favor by reducing the portions. Perhaps they should charge customers for reducing their potential health care costs, assuming they would have consumed the previous portions if available at the same price.

Coke to shrink size of cans in Hong Kong. "Hong Kong's Coca-Cola drinkers are the commodity boom's latest victims. Cans there are being cut in size from 355ml to 330ml. The reason? The price of aluminium has jumped 25 per cent this year owing to rising energy prices. The Chinese mainland's struggling power grid exacerbates the problem. Some smelters agreed to cut output temporarily to reduce the risk of blackouts during the Olympics."

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