Because when firms in the developed world control the distribution channels, they capture a disproportionate share of earnings, leaving little for the producers. Worse, the decade-long decline in raw materials prices has squeezed producers even more. Outside the oil industry, however, cartels have proved merely transitory. And even the oil cartel has been notable in the past ten to 15 years for its inability to control prices. Tata's Tetley purchase suggests a new model to reorient profits in primary goods production the vertical integration of commodity industries, with producing nations in control.
Indian firms are coming of age Such thinking, however, confuses the symptom with the disease.
Developing countries typically haven't controlled the distribution channels for their commodities because they haven't had the expertise to market to developed countries. In the 18th century, India's ruling Moghuls would have found it difficult to run the shipping, inventory, and sales operations the East India Company carried out. The colony takes control That makes Tata's acquisition of Tetley of even greater significance than it first appears to be. The purchase was possible solely because Tata now has more business expertise than Tetley. This proves that the Third World is forming the talent not just to grow and extract, but also to sell around the world.