Other competitors apparently non-existent probably thanks to free market forces
The article goes into the reasons for market consolidation. To summarize: there's a combination of steep regulatory barriers (which inherently favor big, established businesses with large lobbying and compliance budgets), single-supplier state purchase contracts that account for roughly half of all baby formula purchases, and effectively cutting off imports. The market forces are downstream of government action, and the market in question is anything but free.
OK, restricted market forces. Plenty of large players bid (or consider risking an entry) keeping in mind the costs of complying with regulations. One that cheats has lower costs than the others calculate preventing competition.
The solution is to remove regulation and testing so thousands of bidders compete on providing an all melamine formula at an exceptional price?
There are options other than "no regulation" and "exactly the level and type of regulation we have now". For example, you could impose expensive liability for selling defective formula (retail or wholesale), and trust that Walmart will choose reputable suppliers and do proper quality control -- because it's cheaper for them than being irresponsible.
Comments
The article goes into the reasons for market consolidation. To summarize: there's a combination of steep regulatory barriers (which inherently favor big, established businesses with large lobbying and compliance budgets), single-supplier state purchase contracts that account for roughly half of all baby formula purchases, and effectively cutting off imports. The market forces are downstream of government action, and the market in question is anything but free.
OK, restricted market forces. Plenty of large players bid (or consider risking an entry) keeping in mind the costs of complying with regulations. One that cheats has lower costs than the others calculate preventing competition.
The solution is to remove regulation and testing so thousands of bidders compete on providing an all melamine formula at an exceptional price?
There are options other than "no regulation" and "exactly the level and type of regulation we have now". For example, you could impose expensive liability for selling defective formula (retail or wholesale), and trust that Walmart will choose reputable suppliers and do proper quality control -- because it's cheaper for them than being irresponsible.