Despite food prices continuing to rise, grocery stores have witnessed a general increase in profit; Kroger alone has experienced a 7.3% increase in profit. Most super markets have been able to accomplish this by keeping prices low in today's economy; however, if food prices continue to rise growth for these companies may slow.(3)
As things begin to look up for Brazil's sugar harvest, sugar futures decrease 5%. Prices are estimated to stay low compared to the six-month highs that were experienced in August. One of the older sugar traders in the UK hypothesizes that production growth could be led by Europe and Russia, who only make up about a fifth of the world's sugar production currently. Sugar production is 11% lower than it was last year but the production forecasts aren't low enough to stir the market.(2)
A handful of the nation's largest tobacco companies are taking legal action against the federal government right now due to the new warning laws that are set to take effect next year. The companies claim that the laws infringe on their first amendment rights by discouraging the sale of their lawful product. The FDA has not commented on the lawsuit but with recent laws that have been passed in the past several years restricting the sales of certain tobaccos, I would guess that the tobacco companies will lose the case and the new warning labels will still be seen on cigarette packs later next year as planned. The new labels may cause a significant decrease in smoking around the country, but I doubt enough to seriously hurt the industry.(1)
1. http://hmcurrentevents.com/cigarette-warning-ads-and-free-speech/
2. http://online.wsj.com/article/BT-CO-20110916-708325.html?mod=WSJ_FoodAndTobacco_middleHeadlines
3. http://online.wsj.com/article/SB10001424053111904836104576560592168959376.html?mod=WSJ_FoodAndTobacco_leftHeadlines
4. (http://online.wsj.com/article/SB10001424053111903927204576571062062787564.html?mod=WSJ_FoodAndTobacco_leftHeadlines)
In regards to the tobacco industry, how does the federal government infringes upon the tobacco's industry first amendment rights by requiring new warning labels? In addition, what will these warning labels be that have the power to "significantly" alter consumption in this country? In the past, did requiring warning labels significantly deter sales? Furthermore, what are your viewpoints of tobacco companies' future in America? An article mentioned that the future looks bleak for the tobacco company since future laws, such as new warning labels, tighter restrictions, and increase in taxes, may be a heavy below for this industry in the US. What is your response?
ReplyDeleteIn regards to sugar, what are the reasons Europe and Russia are increasing production of sugar? Would this rise in supply decrease the price of sugar?
The claim of the tobacco companies is that the first amendment of the constitution give them the right to commercial speech and the right to communicate with adult consumers who legally have the capacity of mind to decide for themselves whether or not they want to smoke after reading the already existing surgeon general's warning. That's the claim they are standing on, anyways. The new graphics are rather large relative to the size of the box and the tobacco companies are arguing that these are unnecessary/excessive considering there are already warning labels on the box. This won't work and the graphics will be on the boxes, however I don't think tobacco companies will be going anywhere anytime soon. This will discourage people from picking the habit up, but I don't see it making any current smokers quit if they didn't already have that intention in mind. And then, in theory, the number of smokers will exponentially decay as fewer and fewer percentages of future generations pick up smoking. This will still take years and years though, if it's to work at all, and many tobacco companies are sitting on enough money to where they have wiggle room.
ReplyDeleteEurope and Russia could become leaders of production due to the fact that Brazil is currently under producing what was initially expected, but that was a lot. Sugar prices could fall closer to the harvest but I doubt it, right now the market is obviously acting on predictions and I don't think a shortage is expected from anywhere but Brazil, and that's merely relative to past years.