More on the PE of Coffee

Gordon Fitch gcf at panix.com
Mon May 21 04:31:50 PDT 2001



> > The article explains why coffee bean prices are low, but it
> > doesn't explain why the retail coffee price is high.

Jordan Hayes:
> For the same reason that most retail items can get expensive: it's
> what the market will bear.

This begs the question. I understand why rare forms of coffee are expensive, but we're talking about the commodified crap purveyed by Maxwell House and Folgers. In theory, competition should drive down the price. If this isn't happening, there should be some explanation. The recent popularity of capuccino and so forth doesn't provide one, because most of the things done to coffee conceal its taste, making it possible to use the cheaper stuff, and I'm sure this is done.



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