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Sins of minority visited on majority

07/05/2009

Matt Nolan commented on the 2 main supermarket chains colluding over alcohol pricing and their citing social factors to excuse their collusion. Anti-Dismal followed this up. Paul at Anti-Dismal commented on a post at Brad Taylor’s blog referencing the

Australian temperance cartoon

Australian temperance cartoon

concept Bootlggers and Baptists. Brad Taylor’s post drew upon Bruce Yandle’s paper Bootleggers and Baptists:The Education of a Regulatory Economist. This post is well worth reading.

Further, Adam likes Paul Walker’s suggestion that the Commerce Commission should look into this apparent price collusion. At the end of the day we face the fact that the majority are going to be penalised for the sins of the minority. Why do we put up with tendency to punish us all in NZ for the minority’s transgressions. Especially as it is highly likely the minority will continue to transgress.

There is an article in the Herald which tips cheap booze will remain available.

Adam’s attention was caught by this remark from a liquor chain competitor:-

The end of loss-leading was welcomed by Glengarry product manager Liz Wheaden, who said the practice had the potential to lower customer expectations at the same time as it “destroys” brands.

Loss-leading made customers come to expect to be able to buy a product cheap, Ms Wheaden said.

While her company had never used loss-leading, the practice had forced Glengarry to offer more variety and improved customer service to compete.

So competition improved variety of available product and forced the provision of better customer service. Adam considers that to be a good thing. Yet somehow he gets the impression that improved product selection and better customer service from a specialist chain is seen as bad thing by that chain. No wonder NZ business is so often uncompetitive and lacking in enterprise.

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