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Are ammunition manufacturers driving up prices for profit and to starve the competition?
Shooters and hunters across the country are feeling the bite in their wallets from the increases to the price of ammunition since COVID hit a year ago. Most believe it is simply the effect of panic buying that has caused a shortage of supply and a spike in prices. That is what I believed until a few calls from friends put me on a path to discover something much more nefarious. Perhaps it is more than demand that is driving up the price in ammunition. Are ammunition manufacturers intentionally slowing supply while driving up prices for their financial and strategic gains?
I have friends whom I have not talked to in a couple of decades reaching out looking for ammo—many of them are industry insiders. They start out with something like, “Hey, bud. Long time no talk.” Then, before you know it, they lower the boom. “You’re still in the industry, right? Any chance you can get some ammo for me?” For my good friends, I laugh, and the rest I normally just hang up. However, the calls got me to thinking.
I can generally call the larger manufacturers and squeeze at least a few boxes of ammunition for testing and evaluation. That still holds true. However, it is the smaller, boutique manufacturers’ supply that has really dried up. A few calls to find out why nearly knocked me out of my chair.
I started off the conversations by asking how it was going and how sales were doing (small talk). In a crunch market, I expected them to be too busy running the machines at full capacity and counting their money to even take my call. What I got was an offer to buy their loading machines—cheap.
Not that I have that type of scratch lying around, but who would not want to own an ammo company right now? It should be a license to print money, right? Unfortunately, I quickly realized just how wrong I was.
The Cause of the Ammo Shortage
Let’s be clear. We do NOT have an ammo-manufacturing capacity shortage. The empty shelves at your local ammo depot are not the result of preppers hoarding a few thousand rounds in their basement. Likewise, it is not because Bubba working the ammo counter at the big-box store called his buddies when the delivery truck pulled up
Pro shooters often shoot more practice rounds in a month than most avid shooters in a year, but they are not the culprits either. So, who is causing the ammo shortage, and who is paying the bill for the shortage? You and I are getting the bill that may have resulted from a petty war and profiteering campaign by a select few ammo manufacturers, or so I have been told. Let me explain.
You may have heard, watched, or read a statement from a senior manager or CEO assuring us the loading machines are running at full capacity. The good news is the machines at the largest manufacturers are pumping out ammo at full capacity. But only at the largest manufacturers.
The big boys are selling ammunition—at inflated prices due to the laws of supply and demand. However, the demand caused by you and me rushing down to the stores to buy some pew-pew food is not so great that the industry cannot keep up. So, why aren’t the smaller manufacturers pumping out cartridges like they were being spit out of hot-barreled Ma Deuce? Simple. It’s because the smaller manufacturers cannot keep their machines running. They have cases, powder, and bullets aplenty. What they do not have is primers.
A couple of the major players produce the majority of primers and sell them to smaller manufacturers. I am about to relate a claim—from a confidential source, a claim that has been independently corroborated by other manufacturers—of why the big manufacturers are not selling as many primers to other manufacturers as they did in previous years.
I am sure you heard about the breakup of Remington and the ammunition division being sold separately. There was a lot of blood spilled during the bidding process with manufacturers accusing others of intentionally bidding up the price to stick it to the competition, which admittedly is likely true. As they say, what goes around comes around, and payback is a stripper named Karma.
Vista Outdoors (formerly under the Federal ATK umbrella) won the bid, and smaller manufacturers are claiming it is hoarding primers as payback for the bidding war. Let’s acknowledge that Federal ATK does have large military and law enforcement contracts that take priority. As much as I love to shoot, I do not want to do it at the expense of our warfighters’ or law enforcement’s safety. However, industry insiders whom I have talked to allege that there are warehouses of primers being held back by Federal and Winchester, simply to drive up prices and starve the competition.
That’s not to say some primers are not being doled out to other manufacturers. However, while the costs to produce primers have not gone up over the last year, wholesale prices have reportedly been raised nine times. Even with the increased prices, manufacturers are reporting that fewer primers are being shipped to them than previous years. Are you still wondering why ammo prices are through the roof?
It would be easy enough for primer manufacturers to simply claim their production numbers are up and contractual obligations are the only reason they are not shipping more primers. That was where my head went until one of my sources asked a couple of thought-provoking questions. “Do you really think they could not increase capacity or release more primers to other manufacturers if the war in the Middle East was just kicking off or something just as critical to the security of the U.S. was happening?” “During the entire war with Iraq and in Afghanistan, was there a shortage of ammunition as a result?”
Winners and Losers of an Ammunition War
Who loses? You and I lose, of course. If the allegations being leveled by manufacturers are true, you and I are paying more at the ammo counter today than we should. Tomorrow, there will be less competition and fewer choices—both of which are bad for the Second Amendment. Less ammo means less training and fewer new shooters. Accidents will go up, participation will go down, and the net result will be ammunition for the antis to use against us to strip away our Second Amendment rights.
Fewer shooters, more negative press, and less enthusiasm by today’s shooters will be the impetus… when shooters stop going out and banging away at the range, they stop paying attention to the legislative efforts of the anti-gunners. A tit for tat war by a few ammo manufacturers could spell the end of our rights to bear arms for sport shooting and self-defense.