Thursday, January 12, 2012


Hat Tip: Big Journalism 

It appears that Hostess, the makers of all that good food we love,  is going into bankruptcy.

Although Hostess has sales of $2.5 billion annually, that’s not enough to keep up with the rising costs of ingredients like flour and sugar …
… Annual sales have been hovering around the $2 billion mark, but unfortunately these sales have not been able to keep up with rising costs … Rumors are also swirling that Hostess will try and renegotiate labor contracts with local labor unions such as International Brotherhood of Teamsters, as well as the Bakery, Confectionery, Tobacco Workers and Grain Millers International Unions. The Wall Street Journal quotes a source close to the situation saying that Hostess is facing debts in excess of 800 Billion, but does not identify where these debts are coming from …
Can’t tell from where the debts originate? Read a but further into the explanation [my emphasis]:
… Hostess, a privately held company based in Irving, Texas, has outstanding debts of more than $860 million and owes over $50 million to vendors, an economic situation that sources attribute to rising prices for sugar, flour and other ingredients and higher labor costs which the company’s approximately $2.5 billion in annual sales have not been able to cover.
 If Hostess goes out of business a good 70% of the country would go into depression. 

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