A "Fixer Up-er"

Photo by Nesster on flikr.com.

With the rough economy, consumers have learned how to shop smarter.  Shoppers compare prices and deals between stores, and retailers are constantly creating new ways to pull customers in.  Every day, consumers are faced with the decision of what retail location they will make their purchase, usually depending on who will save them the most money.  Retailers have to be creative to come up with promotions to make their business exclusive and attract every customer.

But sometimes in the dark corporate alley, large companies are figuring out how to make the most money with no advantage to shoppers or retailers.  It's called price fixing, and according to the Federal Trade Commission, it is referred to as an agreement between competing companies to raise, lower, or stabilize prices of their products (par. 1).  The article also suggests that companies are required by law to establish the prices of their products based on their own terms, not by agreement (par. 1).  Basically, the companies are trying to reduce competition and mutually decide to equal their businesses by changing the prices of their products.  Price fixing is usually secretive and almost always illegal.

What does this mean for consumers and retailers?  Like earlier mentioned, retailers are always trying to come up with new and creative ways to make their business exclusive.  Usually, they attempt this through attractive promotions and deals.  When companies fix the prices of their products, retailers aren't able to do this because they have to meet those fixed prices of the product.  Retailers are limited on the ways they can convince the consumer that they can save money buy shopping at their location.  For consumers, it just adds to the heavy burden of today's economy.  While retailers struggle to find ways to save shoppers money, the shoppers are faced with buying products they need at a narrow price range.  There is hardly any "shopping around" because all of the products at all of the stores are the same price.

If you do a general search on the web, you can find lots of price fixing cases.  I was so surprised to see how many.  One of the recent cases is that between Procter and Gamble and Unilever.  According to the Yahoo! Finance article by Foo Yun Chee, Procter and Gamble and Unilever were fined 315.2 million euros ($456 million) for fixing prices on washing powder in eight European countries (par. 1).  This is just one example of corporations taking advantage of our needs to make more money.  We need to wash our clothes and both of these companies are responsible for producing a lot of well-known and commonly-used brands.  There's a reason why price fixing is illegal and no one should have that power over us as everyday consumers just trying to fulfill our everyday needs, like washing clothes.

Works Cited

"Federal Trade Commission Bureau of Competition - Resource Guide to Business Competition."    

     Ftc.gov. Federal Trade Commission. Web. 26 Apr. 2011. 

     <http://www.ftc.gov/bc/antitrust/price_fixing.shtm>.

Chee, Foo Yun. "Unilever, P&G Fined 315 Million Euros for Price Fixing - Yahoo! Finance." 

     Finance.yahoo.com. Yahoo! Finance, 13 Apr. 2011. Web. 26 Apr. 2011. 

     <http://finance.yahoo.com/news/Unilever-PG-fined-315-million-rb-2603510995.html?x=0>.