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Saturday, February 09, 2008

The Willy Wonka Conspiracy

Willywonkaresinminibust_5 Chocolate lovers are being encouraged by Merchant Law Group to join the Chocolate Makers Class Action lawsuit against North America's major chocolate producers. Hershey, Mars, Nestle and Cadbury are being investigated by the Competition Bureau for allegedly conspiring to keep chocolate prices artificially high.

Evatt Merchant, the Saskatoon lawyer heading the class action, is inviting anyone who has purchased even a single chocolate bar to participate in the suit.

Merchant said that while consumers who participate in the suit will not likely receive compensation, the companies involved in the collusion, if found guilty, could be forced to sell their products at below-market prices for a certain period. Huh? Let me get this straight: If the companies who are currently being investigated for colluding to sell their products at above-market prices are found guilty, they could be forced to commit another “crime” called predatory pricing or below-market pricing.

If chocolate company executives want to understand the logic of these news rules, they need only read this poem by R.W. Grant:

“Now let me state the present rules,"
The lawyer then went on,
"These very simple guidelines,
You can rely upon:
You're gouging on your prices if
You charge more than the rest.
But it's unfair competition if
You think you can charge less!

"A second point that we would make
To help avoid confusion...
Don't try to charge the same amount,
That would be Collusion!
You must compete. But not too much,
For if you do you see,
Then the market would be yours -
And that's Monopoly!

In the end, lawyers, politicians and Competition Bureau bureaucrats will dust off some Soviet-era calculation for what constitutes a fair price for chocolate.

So much for the subjective theory of value and the free market.

UPDATE

The mainstream media and business press have reported that the Competition Bureau has launched a “probe” or an “investigation” into this chocolate conspiracy matter. There’s nothing alarming in this kind of language. In fact, a “probe” or an “investigation” is exactly what you would expect from the Competition Bureau in response to these allegations. It’s a pretty benign response really, given the hostility directed toward business these days by market regulators.

However, in a scripted speech to the Economic Club of Toronto on December 11, 2007, Sheridan Scott, Commissioner of Competition for the Competition Bureau, said “our investigators raided the head offices of some of Canada’s major chocolate manufacturers as part of a cartel probe.”

I haven’t read a single report of this “raid” in the media. Why is this important? When we ask the state to regulate markets, we are asking it to use its police powers. So do we really want government agents raiding businesses over the price of chocolate?

Posted by Matthew Johnston on February 9, 2008 | Permalink

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Comments

...speaking of Communist, one thing I did like when I was behind the Iron Curtain back in the 70's and 80's was their delicious cheap chocolates sold there.

Posted by: tomax7 | 2008-02-09 3:01:19 PM


the delicious...

Posted by: tomax7 | 2008-02-09 3:01:46 PM


My wife gets chocolates from a Russian expat associate who hands some out to everyone at Christmas each year.
The Russian associate is very proud of these chocolates and they are terrible.

Russian chocolates are very sugary, granular even, and the chocolate texture is chalky and sometimes waxy but always low in cocoa content so the impression is one of sweetness instead of cocoa flavour.

Everyone accepts them and throws them out behind her back to spare her the humiliation.

The only chocolate that I've had that was worse was in 10 cent grab bags that I used to buy as a child at the PX on the CFB I lived on.
those were even worse in the chalky characteristic and tasted like they were Korean war or WWII surplus or something.

As to the class action lawsuit, if chocolate bars are overpriced then they wouldn't sell, would they?

Chocolate is a luxury, not a necessity.
Let the free market reign.

Posted by: Speller | 2008-02-09 4:08:32 PM


I am sure this item will be of great interest to the obese.

Most of the chocolate available has a considerable insect and rat hair content.

But then, the obese will eat anything and everything won't they.

With the savings they are now enjoying courtesy of governmental financial repression of passengers on Canadian Airlines, they can afford even more of that sweet vomit.

Posted by: John West | 2008-02-09 4:15:35 PM


Speller: "Chocolate is a luxury, not a necessity."

You are SO wrong. Good chocolate is a food group all by itself and therefore a necessity. :)

Posted by: Kathryn | 2008-02-09 4:16:10 PM


John

Chocolate is not only for obese people. In fact, it probably appeals more to active people than lazy ones.

North American chocolate is superior to any in the world. Sort of like Alberta beef. Farther away isn't always better.

Posted by: dp | 2008-02-09 5:22:16 PM


Kathryn,

I may have to agree with you.

Bernard Callebaut chocolates are an essential part of my family's Christmas celebration every year.

But Bernard Callebaut chocolates are expensive and I don't regret spending a single penny on them. We don't think any other chocolate is worthy.
;.)

Posted by: Speller | 2008-02-09 5:24:49 PM


One definite plus for Bernard Callebaut. Alberta chocolate is 100% rat hair free.

Posted by: dp | 2008-02-09 5:53:42 PM


Speller: "Chocolate is a luxury, not a necessity. Let the free market reign."

I hope you don't mean that only luxuries deserve the benefits of the free market. Everything, especially the necessities (health care, education and food), deserve to be free of gov't intrusion and mismanagement.

Posted by: Veteran | 2008-02-09 6:10:14 PM


mmmm.... Bernard's....

try working one block from his store/factory... ohhhh the agony!

Sure comes in handy though for menopausal females!

Posted by: annie | 2008-02-09 7:51:26 PM


Annie,if the agony of working one block from Callebaut's is torture,you can always move. Calgary has a few other strolls. Avoid the area around Inglewood though,there is a chocolate store there also..... Merchant Law group is the firm that handled the residential school lawsuit. The more people that they have on record will bolster their case and the payout,if any.

Posted by: wallyj | 2008-02-09 9:14:12 PM


Holy shit wally. That's some mean stuff. I might have laughed except for the racial post script. I really think that blogging and boozing don't mix.

Posted by: dp | 2008-02-09 9:22:49 PM


Lighten up,the area one block west of BC's chocolate shop is well-known for 'illicit relationships'. What racial post script? As for booze and blogging not mixing,that is your opinion,I think they go together quite well, In fact,I may pour myself a shot of fine tequila and have a toast to boozing bloggers everywhere.

Posted by: wallyj | 2008-02-09 9:53:50 PM


Sure why not. Have a couple more. Maybe jump in the car and do a drive through. You seem to be awfully familiar with the hot spots. Hell, have 10 more and you'll be invisible.

I don't live in cowgary, but if memory serves me correctly there are plenty of businesses within a block of that factory.

Posted by: dp | 2008-02-09 10:04:32 PM


I believe that I have been slandered. Dp is implying that I am a drunk racist. The man is also compelling me to commit the offence of impaired driving. Can anyone recommend a good libel lawyer? Preferably without the initials WK,as that one just doesn't like me at all.

Posted by: wallyj | 2008-02-09 10:11:12 PM


Which is it? Slander or Libel? Why don't we quit. There's a Butterbean fight on TSN.

Posted by: dp | 2008-02-09 10:15:14 PM


Sure,and just by coincidence,Charlie and the Chocolate Factory,is also on right now. It is a wonderfully twisted movie.

Posted by: wallyj | 2008-02-09 10:26:43 PM


...oh great now I can't get that 80's song outta my head.

willie willie wonka, don't go! little willie willie wonka...

Posted by: tomax7 | 2008-02-10 9:28:53 AM


Dont' know if you can call a building full of charitable organizations that do what they can to help the city's disinfranchised with private (not govn't) dollars, 'illicit relationships'.. sounds rather nasty to me. Granted it's not the best area of town, but there are many legitimate business doing well.

I guess wallyj can't understand a lighthearted post when he sees it. I always think that people like him must be terribly unhappy that they can't join it or have a laugh. Personally, I'd rather have a wonky sense of humour than to be a jacka$$

Cheers
Annie

Posted by: annie | 2008-02-10 1:50:17 PM


"can't understand a lighthearted post when he/she sees it". Touche,perpetually offended one.

Posted by: wallyj | 2008-02-10 4:07:31 PM


Matthew, Walter Block tells a great two-part joke which is clearly based on R.W. Grant's poem in The Incredible Bread Machine. (Paraphrased and transcribed from this interview, in which he gives a summary of the Austrian view of antitrust http://weekendinterviewshow.com/audio/block.mp3):

The first part:

In the Soviet Union there are three prisoners in the gulag and, as prisoners do, they start to compare notes. The first prisoner says "I was imprisoned because I came to work late and they accused me of cheating the state out of my labour". The second prisoner says "well I came to work early and they accused me of brown-nosing so they put me in jail". The third prisoner then says "I came to work every day exactly on time, and they accused me of owning a western wristwatch."

The second part:

There are three prisoners in the US and they were in jail in the for economic crimes, violating monopoly law. The first guy says "I charged higher prices than anyone else, and they accused me of price gouging and profiteering". Then the second prisoner says "I charged lower prices than anyone else and they accused me of predatory pricing and cutthroat competition". Finally, the third prisoner says "Well, I charged the same prices as everyone else, and they accused me of collusion and price fixing!"

Posted by: Kalim Kassam | 2008-02-10 7:53:56 PM


The stupid software broke the link to the interview, here it is again:
http://weekendinterviewshow.com/audio/block.mp3

In the interview, Walter tells the story that he recounted the joke to an audience of anti-trust lawyers. Predictably, they found the first part quite funny but dead silence followed the second part. As he points out "They knew which side their bread is buttered on."

Posted by: Kalim Kassam | 2008-02-10 8:03:16 PM


you may think im weird but i dont like chocolate so that actually takes off alot of calories and stuff and fat

Posted by: nahnah | 2008-02-13 1:30:09 AM


what about CHEF'S chocolate salty balls?
are they not the most delicious ever??

Posted by: eric cartman | 2008-02-13 8:03:08 AM



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