What can You do when you’re a Candy Oligopoly?

Well if you’re the Mars Company, it means that you can cut off candy resellers from their supply of Colorworks M&M’s.

What does this mean? As Cybele writes:

…when it comes to smaller quantities (one pound or less), buying directly from M&Ms means at least a 20% premium. (Yes, youâ??d think buying direct would mean youâ??d pay less, wouldnâ??t you?) When you knock out the middleman, I can imagine that M&Ms profits on these are pretty high. Even with economies of scale itâ??s clear that the ColorWorks are a huge moneymaker for Mars. A half pound of ColorWorks (whether part of a color blend or a single color) are $4.69 for eight ounces ($.59 an ounce). M&Ms cost about $3.50 for a 12 ounce bag (not on sale) at your local grocer ($.29 an ounce).

Basic Econ 101 – When you’re the single distributor for a product in demand, you control the price. I think it’s time for a road trip to Canada to stock up on some Smarties.

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