There is a Summerland issue that many find deeply troubling: that a local refuse contractor was edged out in favour of a company from New York, because that N.Y. company could offer a cheaper price. Big companies can do that and even run at a loss for a while until they drive out all possible competition. Then they raise their prices.
We saw that before, where we lived, and we saw that again in another way with our neighbour a few houses away here in Summerland. Roger’s local company made wooden products for Ikea at a price favourable to him as a small producer. A saavy business person who knew about Ikea’s tactics said: “Roger, be careful! Don’t put all your eggs in one basket. Ikea has the habit of having suppliers put all their production into a contract with Ikea. Then, after a while, they continually drive the price down.”
Roger didn’t listen. While the going was good, it was very profitable for Roger’s small company. Then the squeeze started by Ikea until Roger couldn’t compete anymore and Ikea chose a cheaper Asian producer. Meanwhile, he had lost his other markets. Finally Roger had to sell all his equipment and move.
I thought that we were trying to encourage local businesses. I don’t know the background of the local refuse company, but I assume that they had to buy equipment and amortize it. So I suppose that they too will be bankrupted when they no longer have Summerland’s contract. Also, I suppose that the large New York company wants to get a monopoly for this area. Big companies usually have deep pockets and can hold out at a low price for a very long time.
The service of the local company was very good. I feel sad for them.
So what’s going to happen to this small business? I thought that council wanted to be promoters of Summerland businesses. Apparently not.
Marilyn Hansen
Summerland