So how come I'm buying Gerolsteiner for $0.89/liter in glass bottles all they way from Krautland where the wages are high, with an unfavorable exchange rate and transportation half way around the world - and local water in plastic bottles costs as much?


Remember the "self-imposed" quotas of Japanese cars back then? Since they were limited on how many cars they could send to USA annually, they loaded up everything with as many options as possible to maximize profit, and sent mostly their top of the line models. Detroit had demanded the quotas so that they "could compete fairly".

So what happened? When Detroit saw the sticker prices of the cars coming from Japan, they jacked up THEIR prices to be "just a hair below" what the Japanese prices were to maximize their profits.

I'd bet that your local water bottle firms are doing the same.