Vista CEO admits "capacity management"

[Squincher]

This sounds far different than "we're making ammo 24/7."

https://www.zerohedge.com/political/what-great-ammunition-shortage-says-about-inflation

 

[AZ8]

“Vista has set up two pricing programs to ensure high prices and stability. The first is a subscription service for ammunition, which gives them a steady flow of ammunition demand and lets them plan production more easily. The second is, well, an informal form of price-fixing, or output reduction. They aren’t totally explicit about it, but they use code words to make the point. Here’s Metz explaining that they collude with their competition to keep capacity lower than it should be.”

 

[RyanT26]

They care about maximizing profits. They do not care about hunters, recreational shooters, or the 2nd any more then a crack dealer cares about the drug addict.
Ultimately the consumer has the power. If you stop buying a product and it’s sitting in the shelves and warehouses they will have no choice but to lower the cost of that product.

 

[260madman]

Yet people applaud when Vista buys a company.

Don’t buy the ammo and let it sit until they need to move it and lower their price. Remember after the 2016 election? I remember.

 

[Ucsdryder]

Or start reloading and buy your components from brands not owned by ADG.

 

[HaydenLane]

The gist of the article is that they aren’t permanently adding total market capacity (and are actively trying to prevent others from doing so), because they don’t want prices to crash like they have in the past.

It’s rather annoying given demand has risen significantly, but it’s not surprising, nor is it as wicked as is being implied here. It has nothing to do with them making or not making ammo around the clock right now.

This is simply what you get with lax antitrust laws.

 

[Trial153]

When in doubt follow the money.

 

[dla]

Remember, the economic sanctions imposed on Russia removed significant competition. Further, the supply-chain issues mess up imports from other countries.
Lack of competition, thanks to the US Government, is allowing Vista to set pricing.

 

[Customweld]

Yet people applaud when Vista buys a company.

Don’t buy the ammo and let it sit until they need to move it and lower their price. Remember after the 2016 election? I remember.

 

[2five7]

We had a higher up from Vista in a deer camp back in 2014 (won't say his name, you'd know him) he told us straight up they were keeping .22 LR production low to keep demand high, back then rimfire was the high demand item of the day. Didn't surprise me, but it does surprise me when they come out and say they are doing the exact opposite and people believe them.

 

[MattB]

This sounds far different than "we're making ammo 24/7."

https://www.zerohedge.com/political/what-great-ammunition-shortage-says-about-inflation

Both can be true.

 

[Squincher]

Both can be true.

Well, they are either working as hard as they can to meet demand, as they claimed previously, or they are structuring supply to keep demand artificially high, as this article claims. It can't be both.

 

[Zappaman]

The barrier to entry for any existing market today is the modern day killer of fair competition in the USA and we have MANY oligopolies firmly in place-- setting prices as far as they can without breaking the economy. And it all looks good on paper (Wallstreet), but we lose innovation (and fair market) pricing.

HP, Apple, and MANY fortune 500s started in a garage back in the day. RCBS started making 22 bullets from lead filled (then swaged) spent 22 casings (*picked up from the ground left behind be a few wealthy gun owners of the day).

There IS a reason CEOs make 40 times (or more) than what they did in the 80s. ALL major industries in the USA (and Congress) are compromised (3-5 companies own 95% of the market)- and you bet your ass they price fix- just look at insurance the last five years- insane!).

If you manage to bring a disruptive (NEW) technology out they (and their congressman) will take 51% (thank you) before letting you mess with the market they have already cornered. I'm 100% pro competition to make the world a better place. And I lost several small fortunes trying to make telecom better 20 years ago (and we did make it better... then congress cut our throats out from under us).

But hey, the world isn't a fair place and the only way to change it (as many have already said)... STOP consuming it (*sadly I am forced to consume certain things... and that's where we are heading folks).

No easy answer, but I can shoot my gun 3 times a year to know it's ON-- I don't need to blow 2000 rounds down it a year and when it's as expensive as it is today... I'll slow down, keep my supply in check, and wait for the next crash-- then buy more stock.

 

[MattB]

Well, they are either working as hard as they can to meet demand, as they claimed previously, or they are structuring supply to keep demand artificially high, as this article claims. It can't be both.

No. It absolutely can be both given current production capacity. One can question whether they should be increasing production capacity, but it sounds like history has taught them that making long-term capital expenditures to address short-term supply shortages is bad business because inevitably that increased production capacity will fall idle at some point.

 

[Jbehredt]

Here’s some pretty solid proof of vista limiting supply to keep prices high. This ammo has been out of stock on the federal website for over a year. The price has increased twice in that time. I received notification via email a couple weeks ago that it was available and ordered 3 boxes. In the package was 1 new meat eater branded box and two old stock boxes. Sure looks like they’ve been sitting on these rounds while showing out of stock and increasing the price.

 

[Reddirtrifleman]

The gist of the article is that they aren’t permanently adding total market capacity (and are actively trying to prevent others from doing so), because they don’t want prices to crash like they have in the past.

It’s rather annoying given demand has risen significantly, but it’s not surprising, nor is it as wicked as is being implied here. It has nothing to do with them making or not making ammo around the clock right now.

This is simply what you get with lax antitrust laws.

They definitely want to get back to late Obama supply/demand/pricing and not dip back into Trump Slump demand/pricing.

 

[roadrunner]

They care about maximizing profits. They do not care about hunters, recreational shooters, or the 2nd any more then a crack dealer cares about the drug addict.
Ultimately the consumer has the power. If you stop buying a product and it’s sitting in the shelves and warehouses they will have no choice but to lower the cost of that product.

But who's disciplined enough to not buy and wait. Somebody's always going to mess it up.

Prisoners Dilemma.

 

[CoStick]

They definitely want to get back to late Obama supply/demand/pricing and not dip back into Trump Slump demand/pricing.

Fear sells

 

[Trial153]

I thought the gun industry was on our side?? Say it ain’t so !

 

[amassi]

Quite a bit of wordplay being done- they were able to purchase Remington ammunition without expanding capacity(investing in more ammo)
Profits are being used to pay down debt and purchase back stock. It would be foolish to build another ammo factory as they wouldn't recoup those costs until the next great panic. Then they'd be stuck with a factory and employees that would be greatly curtailed or laid off. Existing factories would also need to decrease output to balance the new factory.

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