The competition for cola products is so stiff that to give away product to exclude a major competitor and potentially hurt their business and the consumer would be a big time anti trust issue .
The cola wars are just that: It might be soda, but it’s billions of dollars in industry, advertising, etc.
Ain’t no joke: If Coke or Pepsi was acting to drive the other out of such a massive market by giving away product at a loss, one would be risking anit trust violations.
I would love for a lawyer to pop in on this one, since I raised the issue. Yeah, it’s just soda, but it’s billions of dollars we’re talking about …and anti trust issues essentially between any major soda producers.
Well, I had no idea what a controversial topic this was! I have some replies for some of you and what you had to say:
KNEADTOKNOW: What’s “how long I’ve been around for” go to do with anything? I am far from ignorant & I know what soft drinks are made from & everyone is forgetting: THAT WASN’T MY ORIGINAL QUESTION!!!
CEROWYN: astorian didn’t even attempt to answer my question & only offered a sarcastic comment insinuating I was stupid.
SLUGWORTH: Thank you! And by the way, I’m a “she”. =)
WALLOON: I dunno what’s with the “Ummm” business. Ask astorian. Macca’s is a very common nickname in Oz for McDonalds. There are other countries in the world other than the USA u know!
SMAPTI: So far, you are about the only one who’s actually attempted to answer my original question! Thank you!
MOTOG: As above. I never thought about how the ACCC might view this. Good call!
This is what happens when you simplify things to the point where they are meaningless. Giving away stuff or selling at a loss is not illegal and is done all the time.
What is illegal is to engage in certain practices where a dominant company tries to undercut a smaller one for the purpose of driving out of business. This is what is illegal and one way it can be done is to sell at a loss so the other copmapnay cannot compete. But it is NOT the act of selling at a loss that is illegal perse, it is the act of doing things with the intention of getting rid of the competition. IBM and Microsoft have been in court on grounds of violating antitrust laws and were not accused of selling at a loss but rather of other practices. Shooting a gun is not illegal, shooting a gun with the intent of injuring a person is illegal. Giving away stuff is NOT illegal unless it is part of a plan to drive competitors out of business. Many products are sold at a loss in the stores everyday. Many products are given away constantly.
Coke is free to give away as much as they like unless it can be shown the intention is to drive a smaller competitor out of business. Coke can legitimately say that is exposure and publicity which increases brand name recognition. So long as it does not result in a restriction of competition they can do whatever they want with their stuff (except give it to Castro or Ben Laden, I suppose).
Coke and Pepsi do all kinds of interesting things for various markets and restaurants to get business. They will, for example, give a small Mom’n’Pop store a free refrigerator for storing the cans and bottles with the soda’s name plastered all over it. Another trick is to give them a huge free sign with the store’s name (and also the soda’s name) on it.
Are you suggesting that we’re only entitled to comment upon your question, and not on the other statements in your posting? What an interesting proposition. My next posting under that rule will be something like this:
Remember, you’re only allowed to answer the question about the sky–the rest slips in for free!
psychotropic, now you see what a firestorm of controversy, bad feelings and tangents that you can unleash by just asking a simple, direct question…you are now an official member! (FWIW)
Actually it’s my middle name. As I also moved to Bromley, Kent 5 years ago, the choice for online name seemed fairly obvious to me .
I suspect that you’re thinking of Bromley-by-Bow, in east London (not that I’ve ever been there, so I can’t comment on the youths or their headgear). That’ll be my fault for putting “London” and not “Kent” in the profile. I figured everyone knew where London was, but not everyone could place Kent.
I’m an Australian lawyer, but I don’t really have much of a practice in Trade Practices law (what you 'Merkins would call anti-trust). However, for what it is worth I’m pretty sure that in Aus. sailor and errm I think Johnson would be on the money.
If Coke reached a deal with Macca’s to the effect that Macca’s would only sell Coke and would hype Macca’s to the max in all their own advertising (which they certainly do) and in return Coke would give away the syrup, that would be fine. Such sweetheart deals are done all the time in business.
Such deals are only a problem if the market is such that either Macca’s or Coke are in such a position of influence that the deal will decrease competition in the market. I doubt that would be the case here.
And psychotropic. Chill mate. It is not that your low post count means that you lack any official privileges. But it does mean that you are not yet familiar with the culture and tone of these boards. Which in turn means that when a long time resident says something perfectly aligned with the culture of these boards, as astorian did, and you “go off” you sound like a whining brat. No offence, I’m just trying to help.
Read more of Cecil’s comments and you will realise that being a smartass is to some extent, for better or for worse, the way it is around here. Personally I find that fun. If you don’t, you probably won’t be around long.
I know! It’s friggin’ unbelievable. I just asked a very simple question & everyone has lost the plot. And now because I DARE to get a little grumpy when people make snide or sarcastic comments, I’m a spoilt, whiny brat!!! I thought this site was all about helping each other fight ignorance (which I think alot of you confuse with stupidity). I’ll probably get banned for being a “shock horror” FEMALE who dares to speak her mind! I think some of you are the ones who should “lighten up”. NONE of you know me personally and therefore cannot start giving me labels or suggesting I don’t have a sense of humour or can’t tolerate a smart arse. I am a great lover of humour. I just loathe scorn & derision. I think some of you have got swelled heads. Where’s my pin???
And psychotropic. Chill mate. It is not that your low post count means that you lack any official privileges. But it does mean that you are not yet familiar with the culture and tone of these boards. Which in turn means that when a long time resident says something perfectly aligned with the culture of these boards, as astorian did, and you “go off” you sound like a whining brat. No offence, I’m just trying to help.
I thought us Aussies were meant to stick together! You should know, as well as I do, that being a smart-arse is part of the Australian culture & we encounter it on a daily basis. That’s not my “beef”. It’s just that an innocent question has turned into a MAJOR saga. For f*cks sake! I wish the administrators would just close this thread. I don’t care anymore about Macca’s & its wretched Coke/syrup/cat’s piss/whatever the hell it is they serve us poor suckers!! I’m not a whiny brat. I have just never had so much negativity on one of my posts before!!
I’ve never heard Macca’s being a term for McDonalds. Around the States here (and I don’t eat there for lack of money) I’ve called it Mickey D’s, though.
i just wish mac donalds would put more of that damned whatever it is, coke-ish typed flavoring into their fountain drinks. It doesn’t taste “real” as it stands right now.
i’m stayin the hell away from the rest of it. I’m outtie.
But that’s precisely the problem here isn’t it? Coke is the largest soft drink maker in a very oligopolistic market (I’d almost call it a duopoly) and Macca’s is the largest player in the fast food industry by a large margin. I’d be very, very surprised if the ACCC didn’t take an interest in such a circumstance
Motog, remember who supplies KFC, Taco Bell, and Pizza Hut. Any “sweetheart” deals Coke makes with McDonalds have little chance of decreasing competition in the cola market, as Pepsi has some pretty significant deals of its own going.
I’ve only just noticed, several hours later, that the hamsters swallowed my reply to your post, Motog.
Let me see. I think the gist was that Coke already have an exclusive deal with Macca’s and AFAIK there is no suggestion that it is a breach of the TPA. So the only way that it could be a breach of the TPA for Coke to start supplying the syrup free would be if doing so unfairly locked out the competition (in the sense that the competition could not afford to do likewise) and the competition were thereby in danger of going under, thereby decreasing competition.
As reprise has said in the meantime, Pepsi are not defenseless bunnies themselves. They could probably afford to offer precisely the same deal as Coke.
Not least of all because I suspect that the dollar value of the advertising of Coke that Macca’s do as part of their own advertising is in the same ballpark as the value of the Coke syrup supplied anyway. If I’m right about that, I don’t think that Coke could be accused of predatory pricing because against that background Coke could argue they are being paid a fair price for the syrup, not in cash but in kind.
Originally posted by Walloon
And since when has “Macca’s” been a nickname for McDonald’s?
“It is in both the UK and Australia.”
Pardon for being wholly off topic, but it’s such a small issue. Do the UK and Oz use “Macca” for McDonalds because it was a pet name for Paul McCartney? (Lennon used to call him that.) Anyone know the first use/origins of “Macca”?
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