by Patrick Appel

A reader writes:

Hannaford is conflating a lack of choice in *producers* with a lack of choice in *beverages*.  That's stupid.  It's like saying there's no variety in Jelly Bellys because there's only one producer of Jelly Bellys.  And yet I stand there in front of the "Jelly Belly bar" at my local gourmet grocer's and see 30 or more varieties of Jelly Bellys, and that's with only a single producer and no effective competition within that market segment.  Choices in beverages  range from plain old Coca Cola to high-end sparkling waters to energy drinks to organic teas.  Competition amongst the three major producers is absolutely fierce, yet there's still room for specialty and niche producers to thrive (Jones Soda probably being the most prominent, but having moved to St. Louis a couple of years ago, I've been amazed at the number of local and regional soda producers, such as Fitz's, Dad's, and a variety of other specialty sodas).

There are plenty of problems caused by consolidation of control of a market segment to a few large producers.  We have effectively fewer significant producers of MP3 players than beverage producers, with Apple dominating the segment, Microsoft a distant second, and others that produce a vanishingly small percentage of production.  The cost of iPods has stayed significantly stable because of that.  Soft drinks, on the other hand, come in just about every flavor, form, and packaging option available, at extremely competitive price points.  A lack of choice in the beverage market is clearly not a problem.

Reihan has further criticisms.

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