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Posted By Russ Roberts On June 30, 2011 @ 7:02 pm In Food and Drink,Prices,Trade | Comments Disabled
James Roane, Jr., a reader of Cafe Hayek and listener to EconTalk writes:
I just bought a 4 oz package of Dole peaches. When I looked at the package I noticed the following:
Grown in Greece
Packed in Thailand
Sold in the U.S.
Oh, and the price, $.79 in a convenience store-not even a mass merchandiser like Wal-Mart, which would probably sell it for $.59.
How is it possible for peaches, a commodity product, unlike say a car or pc, to be shipped around the world to be packed, so that it can be shipped around the world again to be sold? Everybody in the chain has to make some money off of the transaction and even if the packers in Thailand make the equivalent of nothing, why aren’t they packed in Greece? Last I heard unemployment was a problem there, right? Seems like the transportation cost alone would make this incredibly expensive. If fuel is this cheap, why are we paying $4.00 per gallon for gas? This is blowing my mind.
Good questions. Take a shot in the comments and I’ll weigh in later.
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