Sunday, February 04, 2007

Tomato Justice (4) - McDonalds

I presume that McDonalds buys the cheapest tomatoes it can obtain, provided the quantity and quality is right. It will be quite concerned about continuity of supply as a lack of tomatoes could be embarrassing for its restaurants.
Buying the cheapest product available is not a sin or a crime. It is something that we all do, when whenever we buy something we need. Choosing the cheapest supplier that meets the required quality and quality standards generally leads to efficient processes. McDonalds is not wrong in looking for the cheapest supplier of tomatoes.


McDonalds also functions in a very competitive market. If their sandwiches get too expensive, they might lose market share to other food chains. They have to manage their supply contracts carefully to remain competitive in their own market.

McDonalds could offer a higher contract price for tomatoes. If they did, they would get a lot more suppliers wanting to supply tomatoes. They would have to find another way to choose between prospective suppliers.

The higher price contract may not go to the existing suppliers. A more expensive supplier that is now competitive may get the contract. If the current supplier loses the contract, the pickers that people are concerned about might not benefit. They may even lose their jobs if the grower stops producing tomatoes.

Justice does not require McDonalds to pay a higher price for tomatoes. If they did pay a higher price than they need to, it would be an act of generosity and not an act of justice.


The complete series is here.

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