Economic
BECO001 ASSIGMENT2
Case study #5: Milk Price War 1. What are the main issues? * Main Issues: * Coles and woolies have decreased the price of milk ( 2 litre bottle of own- brand milk just $2) * Based on saving my by Coles and Woolworths customer following the lower milk price; they saved $175 million * Based on saving my by Coles and Woolworths customer following the lower product price; they saved $500 million * Coles and Woolworths have control the milk price * Framer are jeopardising and no money * Reason : * Coles and Woolworths are too powerful * Coles and Woolworths can sell more product * This also affected a increasing profit * Shopper saved more money 2. Who are the key stakeholders that are impacted by the issue? * Coles and Woolworths * They are powerful * They control the product price because they own 75% of the Australia market * Customer : * Affordable price for consumers * They will buy more because they cheap * Inexpensive price for retailers such as coffee shop * More cheap product are available to customer * Farmer : * They do not have money because their milk price has been 38cent per litre * There is no money in milk anymore so they cannot keep the dairy open * They will reduce herds or change to beef production * They will reduce 7.5 % milk product * There was a great deal of debate about how Australian dairy farmers would be affected * Government: * Federal Government de-regulated the industry in 2000. * They do not have perfect policies and regulations to control farm product price * shocked industry leaders and put local jobs at risk 3. What economic theories can be drawn? * Government intervention * Actions on the part of government that affect economic activity which includes “taxes”, price controls, assorted regulations, and control over government spending. * Deregulation allowed for
Case study #5: Milk Price War 1. What are the main issues? * Main Issues: * Coles and woolies have decreased the price of milk ( 2 litre bottle of own- brand milk just $2) * Based on saving my by Coles and Woolworths customer following the lower milk price; they saved $175 million * Based on saving my by Coles and Woolworths customer following the lower product price; they saved $500 million * Coles and Woolworths have control the milk price * Framer are jeopardising and no money * Reason : * Coles and Woolworths are too powerful * Coles and Woolworths can sell more product * This also affected a increasing profit * Shopper saved more money 2. Who are the key stakeholders that are impacted by the issue? * Coles and Woolworths * They are powerful * They control the product price because they own 75% of the Australia market * Customer : * Affordable price for consumers * They will buy more because they cheap * Inexpensive price for retailers such as coffee shop * More cheap product are available to customer * Farmer : * They do not have money because their milk price has been 38cent per litre * There is no money in milk anymore so they cannot keep the dairy open * They will reduce herds or change to beef production * They will reduce 7.5 % milk product * There was a great deal of debate about how Australian dairy farmers would be affected * Government: * Federal Government de-regulated the industry in 2000. * They do not have perfect policies and regulations to control farm product price * shocked industry leaders and put local jobs at risk 3. What economic theories can be drawn? * Government intervention * Actions on the part of government that affect economic activity which includes “taxes”, price controls, assorted regulations, and control over government spending. * Deregulation allowed for