Hear me out now- we've all heard about "Big Tobacco", have we ever considered the concept of "Big Ammo"?

LuckyDuck

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  • Nov 4, 2020
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    This is going to make me sound like I'm off my proverbial rocker and hitting the "devil's weed" and I assure you I have not been doing any of that noise (although maybe I should have been).

    I'll post it here first since I usually haunt SH more than other forums but here I go...

    I'm sure many of us are familiar with the term "big tobacco" and are old enough to remember when that term came into existence. For those younger- essentially there was a point a couple of decades ago when it was financially lucrative to sue Tobacco companies for health "ailments" (and guess what- the courts agreed with the plaintiffs). So eventually the major Tobacco companies figured out that after decades of competing against each other- when it came to this one particular situation it might be better for them to pool their money together to combat these legal charges.

    I'm not arguing that they were right or wrong either, just that they all figured out that they had a common interest in pooling there (otherwise insane) amounts of money together and fighting the lawsuits collectively. I'm sure I'll miss a few but Philip Morris (Marlboro), RJ Reynods (Camel), and plenty others pulled their resources together to fight, not only for their individual companies but for their industry (and arguably that was a successful business decision that I don't seem to recall ever being discussed much).

    So with that said- let's "fast forward to today" and change the party of discussion from tobacco companies producing cigarettes to ammunition companies producing (specifically handgun) ammunition. I'm not arguing that ammunition manufacturers are creating a product that gives their customers base cancer through scientific evaluation, what I'm questioning is whether they figured out (either directly or indirectly) that they'd all be better served focusing on one pistol caliber as the (end all be all) rather than competing against each other on a half dozen+ calibers.

    Think about it- You're ammunition company 'A' & I'm ammunition company 'B'. We're both competing in the same pistol caliber market, we're both fighting the same legal battles for making "cop killer" or "extra deadly" self defense bullets. We're also manufacturing competing products in 25 ACP, 32 ACP, 380 ACP, 9x19mm, 40 S&W, 357 SIG, 45 GAP, 45 ACP, 50 AE, etc etc. and doing so for decades- the 9mm/40 S&W/357 SIG/45 ACP dominates the market preferences and concerns AND you find a way to bridge the proverbial chasm between your two largest market segments- 9mm & 45 ACP and you now have a 9x19 that can meet the current performance standards of the best 45 ACP (never mind that nobody cared to invest in developing the 45 ACP further than it was capable of 20-40 years ago because, well frankly there wouldn't be a financial incentive in that approach).

    Well now you potentially have a "big ammo" situation where they frankly realize they're all being attacked by the same lawsuits and it's better business for them to "circle their wagons" and focus on less calibers (I'm sure that the 9mm being amongst the cheapest for them to produce is just a happy coinicedence) and then free their capital up that was previously spent developing other calibers towards their legal defense/company sustainment monetary requirements.

    I know I'm not the sharpest tool in the shed but I don't know if I've ever seen this particular angle discussed before so figured I'd share it/ at least the concept of it.

    -LD
     
    I'm the first one to raise that question am I not? Finally an original topic to discuss-

    And this has "it all". It contains conspiracy, the concept of 'big corporations' & collusion. And the story (an original one to boot) cuts the proverbial mustard too doesn't it?

    I can only surmise the ages from posters here but just 10 years ago the relevant handgun calibers were 9mm, 40 S&W, 357 SIG, & 45 ACP but... all of a sudden only 9x19 makes sense anymore because it's "just as good" as the rest.

    Sorry but homie & Luck Duck doesn't play that way- a rising tide lifts all boats, and I believe that if all other pistol calibers other than 9x19 stagnated, then it's likely by design and is not without merit mentioning that that this caliber was the absolute cheapest to manufacture for the stakeholders in the 'debate' for handgun calibers & their performance envelopes.

    -LD
     
    This is going to make me sound like I'm off my proverbial rocker and hitting the "devil's weed" and I assure you I have not been doing any of that noise (although maybe I should have been).

    I'll post it here first since I usually haunt SH more than other forums but here I go...

    I'm sure many of us are familiar with the term "big tobacco" and are old enough to remember when that term came into existence. For those younger- essentially there was a point a couple of decades ago when it was financially lucrative to sue Tobacco companies for health "ailments" (and guess what- the courts agreed with the plaintiffs). So eventually the major Tobacco companies figured out that after decades of competing against each other- when it came to this one particular situation it might be better for them to pool their money together to combat these legal charges.

    I'm not arguing that they were right or wrong either, just that they all figured out that they had a common interest in pooling there (otherwise insane) amounts of money together and fighting the lawsuits collectively. I'm sure I'll miss a few but Philip Morris (Marlboro), RJ Reynods (Camel), and plenty others pulled their resources together to fight, not only for their individual companies but for their industry (and arguably that was a successful business decision that I don't seem to recall ever being discussed much).

    So with that said- let's "fast forward to today" and change the party of discussion from tobacco companies producing cigarettes to ammunition companies producing (specifically handgun) ammunition. I'm not arguing that ammunition manufacturers are creating a product that gives their customers base cancer through scientific evaluation, what I'm questioning is whether they figured out (either directly or indirectly) that they'd all be better served focusing on one pistol caliber as the (end all be all) rather than competing against each other on a half dozen+ calibers.

    Think about it- You're ammunition company 'A' & I'm ammunition company 'B'. We're both competing in the same pistol caliber market, we're both fighting the same legal battles for making "cop killer" or "extra deadly" self defense bullets. We're also manufacturing competing products in 25 ACP, 32 ACP, 380 ACP, 9x19mm, 40 S&W, 357 SIG, 45 GAP, 45 ACP, 50 AE, etc etc. and doing so for decades- the 9mm/40 S&W/357 SIG/45 ACP dominates the market preferences and concerns AND you find a way to bridge the proverbial chasm between your two largest market segments- 9mm & 45 ACP and you now have a 9x19 that can meet the current performance standards of the best 45 ACP (never mind that nobody cared to invest in developing the 45 ACP further than it was capable of 20-40 years ago because, well frankly there wouldn't be a financial incentive in that approach).

    Well now you potentially have a "big ammo" situation where they frankly realize they're all being attacked by the same lawsuits and it's better business for them to "circle their wagons" and focus on less calibers (I'm sure that the 9mm being amongst the cheapest for them to produce is just a happy coinicedence) and then free their capital up that was previously spent developing other calibers towards their legal defense/company sustainment monetary requirements.

    I know I'm not the sharpest tool in the shed but I don't know if I've ever seen this particular angle discussed before so figured I'd share it/ at least the concept of it.

    -LD

    where are the legal battles though?


    i think there is some collusion. and as ive said before, Federal's business model doesnt make sense to me as there is really demand in the marketplace for a ton of calibers and loadings that is not being fulfilled. and Federal seems to be intentionally holding back on reloading components, because loaded ammo is a higher profit margin?

    i really think it boils down to we have hit a saturation point in the firearms industry, and the only way to keep any sales going is to constantly offer new, niche calibers that the gun manufacturers can support with factory chamberings. i think that's what drives it.


    i think there is going to be a massive slump in firearms demand and sales as we get towards peak market saturation. but maybe thats just my POV being off base.
     
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    where are the legal battles though?


    i think there is some collusion. and as ive said before, Federal's business model doesnt make sense to me as there is really demand in the marketplace for a ton of calibers and loadings that is not being fulfilled. and Federal seems to be intentionally holding back on reloading components, because loaded ammo is a higher profit margin?

    i really think it boils down to we have hit a saturation point in the firearms industry, and the only way to keep any sales going is to constantly offer new, niche calibers that the gun manufacturers can support with factory chamberings. i think that's what drives it.


    i think there is going to be a massive slump in firearms demand and sales as we get towards peak market saturation. but maybe thats just my POV being off base.
    To preface- again I'm likely 90% in agreement with everything you stated. However- to speak to the 'legal battles' element- the one topic (and yes I might be dating myself) that immediately comes to mind is the Winchester "Black Talons".

    I can't speak for anyone but myself but I really do remember the dateline/60 minutes or 20/20 news cast over the "cop killer" black talons. I'm really not that imaginative to make this up but during one of those shows they featured a surgeon that was borderline hysterical because the 'talons' would pierce their gloves while tryin to retrieve the bullets in surgery. They also defeated body armor worn by police (which is absolute nonsense) and gained national attention as 'armor piercing / cop killers' (not nonsense).

    A lot of that previous text is me explaining my opinion and is not directed towards @Charger442 by any means either.

    -LD
     
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    there’s no grand ammo conspiracy, we get the left overs after mil/police and there will always be new cartridges introduced

    Why would I sell $7/box 9mm to you when I can jack the price up and sell it on .gov contracts?
     
    TL/DR

    There are definitely monopolistic behavior in numerous industries.

    Beef is certainly one where a small number of people collude to fix and inflate prices. But it doesn't matter because it will not be addressed by the people that can fix it.

    I genuinely believe that ammo is no different. There are lots of gentlemens agreements going on to keep prices and supply where they see fit. The money came in and consolidated a lot of stuff. They will not allow the profit margins to correct unless absolutely forced by the government or other outside force.
     
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    Federal Government has decided to be very hands off on regulating anti-competitive behavior so we have gotten a lot of industry consolidation with the price increases that come with that kind of thing. Both parties are pretty deep in bed with big business so I am not sure this is going to change anytime soon.
     
    This hasn't generated a lot of interest but I think this is an important discussion and I truly think I'm onto something with this theory of mine. Most original thoughts/theories are likely met with extreme skepticism and it's on the "challenger" to support their contrary claims so here's a bit of what I'm talking about...

    Part of the problem...maybe I shouldn't call it a 'problem' as it's more so the 'perception' is when we walk into our LGS or even big box stores we see shelves of ammo from various companies, with differing countries of origin and in different color boxes with each major manufacturer having their own lines (premium, self defense, hunting, budget, etc) and we (as Americans) perceive this as capitalism at work and assume that these companies are all competing against each other to provide us the best product at the best prices. It is my belief that this is a facade and the competition we think exists in fact does not.

    Arguably, two of the top manufacturers of handgun ammunition in the US is Remington and Federal (I don't think there's anything overly controversial with that statement). Now I don't know what market share these two companies represent in ammunition sales (and I'd love to find out for that matter) but I'd have to believe it's substantial. But here's where it gets 'interesting' and to the point I'm trying to make, what if I told you (the collective 'you' this is a discussion not meant as a challenge/argument) that Remington and Federal are in fact owned by the same company? What if I told you that Remington ammunition, Federal ammunition, Fiocchi Ammunition, CCI, Heavy-shot, & Speer were all owned by the same company (along with other munition manufacturers)? Because... they are. All of these companies are owned by the Czechoslovak Group (CSG) based out of the Czech Republic. Honest to goodness that's the truth- fact check me by all means but they're all one and the same & not even owned by an American Company. And I can assure you none of those brands are "competing" against each other.

    I'm not done- 'We' have plenty of other competitors right? What about Magtech, or the German ammo 'MEN', or possibly another Czech company, Sellier & Bellot surely those companies provide competition in the market right? Well actually no- those are all the same company as well owned by a Brazilian company called CBC Global Ammunition. They own the lot and again are not even a US company. I can once again assure you that none of these brands are 'competing' against each other either.

    So, in my argument/point/theory, what we once perceived as 9 unique companies competing against each other to provide us Americans with the best and most cost effective ammunition is in fact 2 companies, one of which is based in Europe & the other in South America. Again- please by all means fact check me here-I know it's hard to believe but it's the truth and the implications are dastardly (I don't get to use that word often enough).

    So now the question becomes what percentage of the factory ammunition market share does:

    Federal
    Remington
    Fiocchi
    CCI
    Heavi-shot
    Speer
    Magtech
    MEN
    Sellier & Bellot

    ..encompass? Surely we can all agree that even if Federal & Remington didn't represent the majority of ammunition sales in the US, surely the aggregate of those 9 companies represent the overwhelming majority of ammunition sales. Does it seem as far fetched now that there just might be some substance to my theory about 'Big Ammo'?

    The only other two major players I can think of in the market is Winchester Ammunition (which I believe is still owned by Olin Corporation) and Hornady who I think are still independent. Sure there's other boutique loads trying to manufacture niche loadings in the scraps that are left in the ammo market but... and this is a Sir-mix-alot sized 'butt'... keep in mind that these afore mentioned companies in many cases control the supply line of essential components required in the manufacturing of ammunition to these otherwise small businesses.

    So with that said (hoping that clarifies the point I'm trying to make/the theory I'm trying to sell), have I (1) demonstrated provable facts (2) did that surprise anyone and (3) has this clarification shifted anyone's perception in anyway?

    I can keep going but I tend to get longwinded and want to keep this as a discussion. Again- I know I'm biased but I really do think this is one of the few original thoughts brought up on a forum and that there is substantial merit to the tree I'm barking up.

    -LD
     
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