It wouldn’t only be economies of scale that are lost. Efficiencies from having only two supply chains would also be lost. Although the two giants each have at least two “brands” they often use the same trucks to deliver to both brands. That would not happen if the brands were under separate ownership. Thus breaking the duopoly could lead to a significant increase in truck traffic depending on how much fexibility is available with load factors and driving hours regulations.

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‘Tis an interesting connundrum.

Happy duopoly’s are usually looked on as only marginally less bad than monopolies, but that may not be the whole story. As that annoying television ad reminds us, “We buy more, you pay less!”; is it possible that if each of the large supermarkets had their own purchasing, warehousing and distribution that we might actually end up paying more for food as economies of scale are lost…?

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Frog — the “peak oil” link talks about demand from emerging markets, biofuels etc — but doesn’t mention peak oil. I believe the issue is still debatable, although demand for oil is obviously outstripping supply.

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