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· Posted on
February 21, 2024

Amcor's prices Am-soar by 650 million buckaroos and that's called cost-push inflation

Amcor is the world's largest consumer packaging company, with humble beginnings in Melbourne back in 1860.

What's the key learning?

  • Amcor just implemented $650 million worth of price rises across its global operations in the December half
  • As inflation increases, Amcor has had to pass on rising raw material costs (i.e. resin, PET plastic, aluminium, inks) onto their consumers 
  • This is called cost-push inflation, and it happens when there is an increase in the price of raw materials, which leads to higher costs for end-products.

Background: Amcor is the world's largest consumer packaging company, with humble beginnings in Melbourne back in 1860. Fast-forward to the present day, and the company is worth around US$26 billion, with 225 packaging plants across the globe.

What happened: Not only are they big, they're also kinda expensive. Amcor just implemented $650 million worth of price rises across its global operations in the December half.

What else: As inflation increases, Amcor has had to pass on rising raw material costs (i.e. resin, PET plastic, aluminium, inks) onto their consumers. 

So what's the key learning?

💡When it comes to inflation, there are two main causes.

💡We've got:

  1. Demand-pull inflation: when there's a supply of money which stimulates demand for spending.
  2. Cost-push inflation: when there is an increase in the price of raw materials, which leads to higher costs for end-products.

💡In order for companies like Amcor to maintain profit levels and keep up with expected demand, they need to increase their prices. Eventually, Amcor's customers could pass on rising costs to us. No thanks!

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