🏷️ fixing prices
♟️ price, check
Can - and should - the state do more to introduce some basic pricing predictability for shoppers (on key/core grocery items)?
I ask this in an opinion piece in the Globe and Mail’s Report on Business today (but also yesterday online), even though I feel two years too late with the policy echo. Is it ever too late to correct a mistake? Not according to the Berestain Bears, baby!
Parliamentarians and policymakers have been scrutinizing the grocery industry. The Standing Committee on Agriculture and Agri-Food (AGRI) invited grocery CEOs to testify on the rise of food prices and the Competition Bureau concluded their Retail Grocery Market Study, which surprised no one by concluding that the sector doesn’t have enough competition. I get it - slowing the rate of price growth doesn’t magically create more competition, either.
In the US, the Department of Agriculture is seeking to lower food prices and boost competition by joining with 31 states and Washington, D.C., to target price fixing and other anti competitive behaviour in the food and agriculture sectors. Their whole-of-government approach tackles tricky competition issues head on.
Compounding the impossibility of budgeting for so many is the real-time dynamism of pricing. Murky markets with price fluctuations make budgeting impossible. In “Winner Sells All,” journalist Jason Del Rey chronicles the pricing wars between Wal-Mart and Amazon as they sparred for market share in the category of grocery. In order to price match or undercut each other, both firms invested heavily in digital technology that allowed for real-time monitoring of price fluctuations. Maybe the government should ALSO use such technology to monitor the grocery marketplace and take action against regional and brand price differences if and when they occur. The Consumer Price Index is an aggregate measure that doesn’t show dynamic prices in real-time that are location or sector-specific. It is too broad and blunt to measure the complex nature of dynamic markets.
Recent reporting from the New Statesman elaborated on how the prices of most goods are not set by humans, but by automatic processes set to maximize their owners’ gains. Our evolving competition law may begin to consider algorithmic collusion, which *may* also garner more attention from regulators through the prospective Bill C-27, which *could* prompt consideration of the effects of algorithmic conduct in the public interest.
*FYI and because it ALSO didn’t fit in the piece but I spent time clicking around and emailing to understand this: And while Marketing Boards (bodies representing producers of one or more specific agricultural commodities) are generally hated (*this is an understatement), when you compare the prices of eggs, poultry, and milk post-pandemic between Canada and the US, our prices were more controlled (albeit with a bigger retail markup). Marketing Boards stabilize the ecosystem by reducing price spikes and avoiding price collapse. Today, agri-business in Canada is highly concentrated, but this was not the case when marketing boards were first introduced.
👋 I’ve been quieter and slower as of late, but I’m still sneaking in snack-sized contributions and commentary in the broader policy thinking space where I can. Below are some ways I jumped in July’s fray:
I wrote for the Toronto Star about how I think about the Online News Act and discussed the bill on the CBC’s The Sunday Magazine;
We discussed the interest rate on CBC’s the Sunday Conversation (I tuned in from a former insane asylum in Buffalo with a really interesting architectural history);
On CBC’s Metro Morning, we discussed the Minister of Innovation, Science, and Economic Development’s announcement on the TTC re: wireless;
I spoke to CBC News Network about the White House’s AI legislation (can’t find the link, haunted by my glasses glare);
FYI that I’ve returned to Newstalk 1010’s Free For All (Round Two) Panel (also on iHeartRadio). Now I am on with fellow panelists on Friday mornings at 7.45 AM (instead of Wednesday). Tune in to find out how host John Moore makes my name sounds *extra* fancy.
Hi Vass, good post. What I would like to see at grocery stores is price-per-unit labels that are not written in tiny fonts, are not hidden away on the bottom shelves where they are difficult or impossible to read, and do not use differing units of measurement for different products. That would make it much easier to compare prices. It would also make it easier to shop in crowded stores, since people wouldn't have to block aisles as much while trying to squint at a bunch of tiny labels
Price controls necessitate product shortages, which are always worse. Plus, some increases are legitimate responses to the very real inflationary impulse we just suffered (for that, you must tackle the Fed and shoddy energy policy).
There has definitely been some taking advantage of the loose nature of prices lately, though. Certainly, companies with pricing power like to see how far they can go. That said, the way to go about this not to treat the symptoms.
Look for ways to open up competition. The only reason companies get away with this sort of thing is the lack of competition. This is a complex phenomenon involving many causes, including various corporate welfare schemes, reliance on passive index investing, and monetary policy. But often it involves barriers to entry so immense that it’s cost prohibitive to compete, and a sometimes those barriers are onerous regulatory burdens (often established by the biggest players’ lobbyists). There’s a lot government can do about that.
With competition, a lot of these games our oligopolistic companies play will vanish in real time. Reviving it should be a top priority.