Could a Price War on .22 Ammo Drive Down Prices?
OutdoorHub Reporters 12.21.16
Could a price war on .22 ammunition be a possibility?
A price war in .22 ammunition would be music to gun owners’ ears. According to The Truth About Guns, Federal Cartridge’s .22 ammo production was supposed to increase by 20 percent in 2016. Well, with the new year ringing in right around the corner, it appears that goal will fall short this year. However, production facilities are getting a “revamp” at their Lewiston, Idaho, location, so good things are on the horizon. . . at least for ammo prices.
In this interview with The Lewiston Tribune, Marty Zacha, vice president of ammunition products at Federal Cartridge, subtly hints towards the possibility of a price war in .22 ammunition, as well as shares his thoughts on .22 rimfire production expansion:
BP: Are you seeing any reduction in sales now that a Republican has been elected president and people are less worried about new regulations for guns and ammunition?
MZ: Yes. There’s been a few order cancellations. Not a lot, but a few. If you go into a gun store, even right up here at Sportsman’s Warehouse or North 40 in Lewiston, you see a lot of guns on the shelf, where a few years ago you wouldn’t have seen that. It was harder to find what you really wanted.
BP: What will you do with the upgrade if demand for rimfire ammunition plummets?
MZ: This plan was born more to reduce costs and improve efficiency. Historically in the ammunition market, when things start to go soft, which we’re starting to see right now because of the election, it becomes a price war. If the market changes, the rimfire equipment can be switched to manufacture power loads that drive fasteners into steel and concrete in construction and stunners for the meat processing industry. We’ve done those in Lewiston for years. (for over one half century) That’s a very big business for us. It has been anywhere from about 12 percent to 50 percent of what we do in Lewiston. There’s points where we can adjust if need be depending on what the market is doing. It could be bigger or we might redeploy somewhere instead of what we originally planned.
BP: Could Vista Outdoor choose not to order equipment for later phases of the project?
MZ: It would take a very dramatic market correction to make that happen.
©2016 by Dean Weingarten: Permission to share is granted when this notice and link are included.