Down in Westhaven Marina in Auckland, I have it on good authority that a bunch of the biggest boats are owned by supermarket franchise owners. Why should we care? I'm totally cool with people making lots of money when they have worked hard and furthered society with productivity enhancing innovations. Who would begrudge Peter Beck of Rocket Lab his fortune? But folks making money out of owning a duopoly supplier of essential food items? Give us a break.
The High Court judgement this week touted by the Commerce Commission as a great success (it fined Foodstuffs North Island $3.25 million for imposing anti-competitive land covenants to block competition) was quite the opposite. It will have the company & franchise owners laughing all the way to the bank. There are over 300 Foodstuffs stores in the North Island, so that represents around $10,000 per store. Golly Gee Whiz. That's not enough to stock the fridge on one of their boats.
Has the government gone mad? Has the Commerce Commission gone mad? Has the Wellington judge gone mad? Do they have any idea of what a joke fine has been imposed? The judgement sends a message to everyone contemplating creating a monopoly in NZ - go for it. The worst that can happen is you get caught, in which case you pay a fine representing an inconsequential amount of the money you have made.
Sources:
https://www.msn.com/en-nz/news/other/foodstuffs-north-island-fined-325m-for-anti-competitive-land-covenants/ar-AA1oqjIC
Sources:
https://www.msn.com/en-nz/news/other/foodstuffs-north-island-fined-325m-for-anti-competitive-land-covenants/ar-AA1oqjIC
Professor Robert MacCulloch holds the Matthew S. Abel Chair of Macroeconomics at Auckland University. He has previously worked at the Reserve Bank, Oxford University, and the London School of Economics. He runs the blog Down to Earth Kiwi from where this article was sourced.
7 comments:
Lets not forget that they will also 'recuperate' the costs through their priceing. This is reason enough for the CC not to allow FS NI and FS SI to become one large player.
Spot on again Robert.
These same supermarket monopolies that in effect closed down the apple industry co-operative because they didn't like the combined effort of growers to market their fruit .
As Professor Jaqueline Rowarth says in a recent column on why farmers need co-operatives "without a strong co-operative NZ farmers are peasants"
All I can say is...we need Aldi in NZ.
Maybe Professor, some one needs to reveal "who are the actual owners of the Business"!
and it will be tax deductible
I like your description of wholesome capitalism which contributes to society. I like the verse from proverbs. 'Your wealth will not save you from God's judgement. " Think this or karma or something else . Even the universal Golden Rule. But believing in justice means greed will not be rewarded in the long term. When I see wealth flaunted I always think : Did you guys actually contribute to society?
I am surprised the judge didn't find enough reasons to bring the conviction down to a one week home detention on their boats.
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