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An interesting analysis of the ammo market

SharpsNitro

SharpsNitro

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Jan 22, 2013
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I ran across Matt Stoller’s substack last year, he writes a lot about monopolices. Today he dropped an article about the civilian ammunition market that was an interesting read, it’s a very different take than the public relations spin coming out of the industry.

mattstoller.substack.com

What the Great Ammunition Shortage Says About Inflation

Concentration is increasing prices and keeping them high. The ammunition duopoly and the "Great Ammunition Shortage" is just one example.
mattstoller.substack.com mattstoller.substack.com
 
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Very good well researched article with some great quotes.

I think these say it all.

They're all greedy cocksuckers and there is a reason why the Sherman Act was passed in...what?....1890?

. As the CFO of Vista, Sudhanshu Shekhar Priyadarshi, told investors in November, margins rose to a record 27% in Q2 of 2021, on top of an already extraordinary 2020.
Click to expand...

The head of ammunition for Vista, Jason R. Vanderbrink, explained that the “most important” reason for the Remington acquisition was “added capacity to Vista without increasing the overall market capacity."
Click to expand...

Christopher T. Metz, the CEO of Vista, talking about their purchase of Remington, a competitor in the industry.
Because of some of the consolidation we've done with Remington, even if you look long term, we don't see the same type of price compression the industry may have experienced in previous times.
Click to expand...
 
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well elevated pricing always brings in more in players. I've said before, foreign companies should build plants in mexico, brazil, or the like and ship north
 
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Just a simple question, I thought Fiocchi was going to open an ammo plant in the South. Would that not have an impact on availability & price?

Maxwell
 
RUTGERS95 said:
well elevated pricing always brings in more in players. I've said before, foreign companies should build plants in mexico, brazil, or the like and ship north
Click to expand...
Actually w loaded ammo I do not think this is historically true.

That is the point of the article, I believe. Very high financial barrier to entry couple w industry consolidation results in what we have now. I.e. Vista making money hand over fist and us taking it up the ass.

There really was a reason the Shermann Act was enacted. Right?
 
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Baron23, you caught the key points I was thinking I should have posted but thought it was better to let people read it without preconceptions. The comments from the Vista execs are very different from the PR bullshit they have been spinning to their customers.

It seems like other industries are looking to follow this model. In addition to the meat packers which Stoller has written about many automakers have stated their plans to maintain lower production to maintain higher pricing.
 
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I think these large companies can see the writing on the wall. They are making hay while the sun shines. If we make it through the current regime they will still be in tact and will continue business as usual. If the country gets flown completely into the dirt, they will have made a ton of money before it happens.
 
nso123 said:
I think these large companies can see the writing on the wall. They are making hay while the sun shines. If we make it through the current regime they will still be in tact and will continue business as usual. If the country gets flown completely into the dirt, they will have made a ton of money before it happens.
Click to expand...
I agree......... Every large corporation has their "poison pill" in place. They have bought back their own stock, inflated the price per share, paid high dividends and kept the stockholders happy.... Basically they are playing with other people's money. A guy can stay at the Black Jack table a long time playing with the money of other's. Going into 2022 it will be interesting to see how long they get to play with other's money. All of the middle men are making their cut, regardless.🍿
 
myronman3 said:
fuck it. get a crossbow. dont need primers or powder for that.

you want to talk about a deterrent? imagine seeing your hood rat buddy take a grim reaper to the chest and spraying blood all over you, your other buddies, and everything else within a 15 foot radius.

save the other stuff.
Click to expand...
Ive never seen a fully semi automatic crossbow. They take to long to relaod. Give me an AR with20 mags and a 1911 with about 10 mags. If they get through that at least theyll have paid a steep price when they reach the booby trapped Claymore.
 
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SharpsNitro said:
I ran across Matt Stoller’s substack last year, he writes a lot about monopolices. Today he dropped an article about the civilian ammunition market that was an interesting read, it’s a very different take than the public relations spin coming out of the industry.

mattstoller.substack.com

What the Great Ammunition Shortage Says About Inflation

Concentration is increasing prices and keeping them high. The ammunition duopoly and the "Great Ammunition Shortage" is just one example.
mattstoller.substack.com mattstoller.substack.com
Click to expand...

"There are many ammo brands, like CCI, Federal, Remington, Winchester, and Speer, but they are all controlled by two firms - Vista Outdoor and the Olin Corporation. "

I have LONG thought this was the ultimate root of the problem. There is/has been a huge consolidation in all sorts of segments and not just loaded ammo. Hogdon used to be just themselves. Now they have all Hodgon powders, IMR, Winchester, Ramshot, Accurate, and Blackhorn.

The same exact thing is going on in the beef industry. Two or maybe three companies control 80% of the beef supply.

To think that this is all a coincidence is foolish. These guys have been setting this up for a really long time.
 
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myronman3 said:
fuck it. get a crossbow. dont need primers or powder for that.

you want to talk about a deterrent? imagine seeing your hood rat buddy take a grim reaper to the chest and spraying blood all over you, your other buddies, and everything else within a 15 foot radius.

save the other stuff.
Click to expand...
Flying Archery Toxics!
 
Pushing African swine flu to cull the pigs and force more people into eating that Gates fake meat bullshit.
 
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XTREM HTR16 said:
Yeah and now .gov is going after the top 4 meat companies….
Click to expand...
The Government is not going after the 3 -4 major meat packers..... What the government is doing is throwing $1 billion at a problem.... The same thing they have done for many years. Doing the same thing over and over and hoping for a different result.
www.desmoinesregister.com

Biden unveils $1 billion plan to increase meatpacking competition, lower consumer prices

Biden's plan includes $375 million in financing to jumpstart independent beef, pork and chicken processing. Rising meat prices have spiked food costs.
www.desmoinesregister.com
 
Maxwell said:
Just a simple question, I thought Fiocchi was going to open an ammo plant in the South. Would that not have an impact on availability & price?

Maxwell
Click to expand...

I used to work at Vista in Rim Fire Metal Parts - making brass. Depending on the header stamp we used it was CCI, Fiocchi, Federal, and a few others I don't remember.
 
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SharpsNitro said:
I ran across Matt Stoller’s substack last year, he writes a lot about monopolices. Today he dropped an article about the civilian ammunition market that was an interesting read, it’s a very different take than the public relations spin coming out of the industry.

mattstoller.substack.com

What the Great Ammunition Shortage Says About Inflation

Concentration is increasing prices and keeping them high. The ammunition duopoly and the "Great Ammunition Shortage" is just one example.
mattstoller.substack.com mattstoller.substack.com
Click to expand...
Excellent article.

This is an excellent example of the erosion of morals and ethics of the free market economy: especially when speaking of retaliation like what the meat industry, and other industries do/have done.
 
Numb_Skull said:
The key point is that you are letting a disgusting Punjabi who shits in the street control you. How does that make you feel about yourself?
Click to expand...

This is an American company, traded on the New York Stock Exchange, headquartered in America, that employs Americans, ran by an American CEO, CFO and COO.

They hire one fucking guy with a foreign name who lives in a suburb of Minneapolis, Minnesota and your primary concern is that he might be shitting in the streets while the company rapes you on ammo prices?

I'm pretty sure that you missed the "Key Point".


Towns and Cities in Minnesota usually have some ordinance against defecating in public, so I'm guessing you'll be ok if you ever choose to visit.
 
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Inflation is a function of the monetary system, and is felt in every good and service.

The author conflates inflation with supply/demand issues. As such all of his findings are, well, void.

One of the more interesting questions in the discussion over inflation is the relationship between concentration and pricing changes. Most economists believe that supply shocks are increasing profits, but that this increase will serve as an inducement to more productive capacity.
Click to expand...

Any business person who would put capital into a high-barrier to entry market base on supply shocks is an inherent moron. Supply shocks are transitory and short lived in nature, you'll never get up and running in time. Supply shocks can increase profits, but only when they are asymmetrical. EVERYONE is having issues moving their goods and getting materials, which is driving up the prices based on supply/demand.

The only real question is if the gov/FED throwing money into the economy is going to cause inflation. It should, those are fast dollars flying- people spend that crap as we have seen. These supply/demand spikes will go away, and then you can see what effect monetary policy has had.

Supply/demand is the waves, inflation is the tides/flood. Weather and climate. They use the same measures- water height and temperature, but they are different things, and people jack it up all the time.
 
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Again another failure of .Gov . Not doing the job they are paid to do . Big Corp has bought the government .
 
I worked for pulp and paper industry. Seen same type of comments from senior leaders reference toilet paper and plywood. It is business. They exist to make profits for shareholders and bonuses for C suite. Just that simple.
 
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Lightning8 said:
I worked for pulp and paper industry. Seen same type of comments from senior leaders reference toilet paper and plywood. It is business. They exist to make profits for shareholders and bonuses for C suite. Just that simple.
Click to expand...
Many of the Senior Leaders are job scared....The rank and file employees have trades knowledge and can survive a crash.... Few CEO's and elected officials could start a fire with flint and steel.... They have painted themselves into a corner. 8 million American's have quit their jobs. Long ago we were threatened "If you walk off the plant will be run by supervision"..... Doing the same thing, over and over and expecting a different result.

 
‘Tis folly to ascribe to malice what can be explained by incompetence.
 
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FromMyColdDeadHand said:
Inflation is a function of the monetary system, and is felt in every good and service.

The author conflates inflation with supply/demand issues. As such all of his findings are, well, void.



Any business person who would put capital into a high-barrier to entry market base on supply shocks is an inherent moron. Supply shocks are transitory and short lived in nature, you'll never get up and running in time. Supply shocks can increase profits, but only when they are asymmetrical. EVERYONE is having issues moving their goods and getting materials, which is driving up the prices based on supply/demand.

The only real question is if the gov/FED throwing money into the economy is going to cause inflation. It should, those are fast dollars flying- people spend that crap as we have seen. These supply/demand spikes will go away, and then you can see what effect monetary policy has had.

Supply/demand is the waves, inflation is the tides/flood. Weather and climate. They use the same measures- water height and temperature, but they are different things, and people jack it up all the time.
Click to expand...

Finally.........an intelligent thought in this whole mess.

Thank you.
 
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The linked article in the OP should be required reading for all shooters. I wonder which brands of smokeless powders, and what percentage of the powder market, Vista and Olin control? But they control most of the primers market so I guess reloading is under their thumbs, too.

As a general strategy we all should reload- even if just to have more control over our own ammo inventories.
 
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Sig Sauer is one of the biggest U.S. ammo makers behind Vista and Olin and isn't owned by either, and it disappointed me that they bid just a bit lower than Vista for the bankrupted Remington ammo business.
 
All according to plan. Funny how many of us refused to drink the kool-aide they were laying down...

Another benefit to the elitists I suppose. If you can't outright outlaw the 2nd, just make it so expensive that only the elite can afford.

:)
 
Having been in the business world a fair bit, I recall a while ago in the dot com era I know of a guy that sold his company for a good 9 digit sum. Within days/weeks of him handing over the keys the people that bought it closed the whole thing down in it's entirety.

Maintaining the ability to control market share is a key factor in monopolistic behavior. They don't want you to have options. It's like that old comedy "Moon over Parador"... the dictator was giving a tour during the 'elections' in his country and showed two campaign ads...'They can vote for the blue me or the red me'...

If someone had the correct licenses and money to do it, a pretty good strategy would be to say import a billion dollars worth of primers from East Europe or something. When those other companies start getting cute start releasing them out of the warehouse....
 
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I missed the dip on this one: https://www.marketwatch.com/investing/stock/vsto
Screenshot_20220110-151759_Chrome.jpg
 
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