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Project Hammer: reduce collusion in the Canadian grocery sector

jacobfilipp.com

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Re: Project Hammer: reduce collusion in the Canadian grocery sector

#101

Post by bobthepanda »

saghm wrote: post #72
juujian wrote: post #2

I'm sure there is a theory of how this would reduce prices - what is it? Real estate markets became infinitely more transparent over the last couple of years, to the extent that the data is used to train data scientist. The result? Speculators entered the market at it's messed up.

Is speculation as much of a concern for groceries? Real estate is an asset you can hold onto for a while, but I feel like buying up groceries just means you'll have a lot of expired food pretty soon if you can't find a buyer.

This actually happened to onions in the US so now we have https://en.wikipedia.org/wiki/Onion_Futures_Act

Re: Project Hammer: reduce collusion in the Canadian grocery sector

#102

Post by jfil »

huitzitziltzin wrote: post #92

‘’’ Reach out to me (email “jacob” at this website) if: You can do economic analysis of pricing data, and especially the interaction/correlation of multiple streams of prices across time ‘’’ The item in that quote is significantly, significantly harder than the author is giving it credit for. Canada has a competition policy agency. They are (almost surely) entitled to demand data from firms as part of an investigatio…

Hey man, I'm just creating the hammer - you can throw it in the lake, make a treehouse for your kid, smash a window, up to you :-D

Re: Project Hammer: reduce collusion in the Canadian grocery sector

#104

Post by jessriedel »

motohagiography wrote: post #50

canada's attitude toward competition is different than that of the US though. our agricultural products (dairy, wheat, maple syrup, and to a lesser extent retail beer and alcohols) are controlled by state monopolies who set prices. the reason food is so expensive is because of fuel costs from the last few years, which were further not-helped by both an increase in federal taxes on fuel and the semi-official policy of…

Yes, the US is no stranger to government influence on the prices of ag products, but my impression is that Canada is a couple notches above, especially the highly populous Ontario. Any comparison of the two needs to take that into account.

Based on a brief look by my layman eyes, it does not seem like Canadian grocery chains are vastly more concentrated relative to the US. It's hard to compare because so many of the chains are owned by the same few brands, but this chart is helpful:

https://www.howtocook.recipes/the-largest-grocery-stores-and...

I'd look at the top ten and then ignore Walgreens and CVS. I think you've got 8 conglomerates serving the vast majority of the 330M Americans. (Unclear to me whether Target should be included; I don't know how much of the sales listed there are actual groceries.) The OP article suggest 5 conglomerates serve the large majority of the 38M Canadians.

Re: Project Hammer: reduce collusion in the Canadian grocery sector

#105

Post by jfil »

motohagiography wrote: post #50

canada's attitude toward competition is different than that of the US though. our agricultural products (dairy, wheat, maple syrup, and to a lesser extent retail beer and alcohols) are controlled by state monopolies who set prices. the reason food is so expensive is because of fuel costs from the last few years, which were further not-helped by both an increase in federal taxes on fuel and the semi-official policy of…

I agree with you that Canada has a very unique attitude to competition - it's "Can't we all just get along?"

Regarding food, I beg to differ. The top 3 grocers have price-fixed bread [1] (one prosecution since that article), wage-fixed [2] and have no-compete agreements for certain times of the year [3]. Food prices are not driven by underlying costs here.

1. https://www.cbc.ca/news/business/bread-price-fixing-loblaw-1... 2. https://financialpost.com/news/economy/how-hero-pay-scandal-... 3. https://www.cochranetimespost.ca/opinion/columnists/charlebo...

Re: Project Hammer: reduce collusion in the Canadian grocery sector

#106

Post by Fervicus »

a13n wrote: post #84

Love this project. I just moved from Toronto, and compared to the US was frustrated by how every major industry in Canada was basically an oligopoly. In Canada if you look at telecoms, banks, insurance, grocers, airlines, etc – there are a few major competitors and that's about it. It's very difficult to start a competitor, often for regulatory reasons, and most smaller competitors end up getting bought out by the bi…

> It seems tricky from the gov's perspective because this oligopoly/collusion behavior likely fuels higher GDP and more tax revenue... but ultimately more competition and consumer protection would make for a better country to live in.

Or because the government is working for these oligopolies and not for the people, regardless of the color of their party's logo.

Re: Project Hammer: reduce collusion in the Canadian grocery sector

#107

Post by jfil »

chaostheory wrote: post #79

Isn’t the root of the problem Canadian protectionism? By law, it’s near impossible to have new (foreign) competitors in the Canadian market. Same for industries like telecom.

I believe one of the key issues is anaemic anti-monopoly laws and enforcement. The grocery sector in Canada is very healthy and innovative, even without foreign entrants.

It's just that any successful small chains get eaten up by the giants - "Adonis" got bought by Metro, "Farm Boy" got bought by Sobeys and "T&T" got bought by Loblaws. Any new threat gets eaten up by the big players.

Re: Project Hammer: reduce collusion in the Canadian grocery sector

#108

Post by delichon »

Say I set my apple prices at 0.5 standard deviations below the average prices I can find in the vicinity. Is that an attempt to undercut the market or collude with it?

If I set the price to the average, is that collusion or just trying to maximize my profit on apples?

If I set it higher than average, is that collusion, or me telling the market that I think I have premium apples?

How do you get from correlation to collusion? This project seems to build on an assumption that it is collusive to set prices based on other market prices, or else how could it be a hammer to bash collusion? Is it required to be ignorant of market prices when you set a price so that regulators can assume that correlation is evidence of an agreement?

Re: Project Hammer: reduce collusion in the Canadian grocery sector

#109

Post by b112 »

jfil wrote: post #100
a13n wrote: post #84

Love this project. I just moved from Toronto, and compared to the US was frustrated by how every major industry in Canada was basically an oligopoly. In Canada if you look at telecoms, banks, insurance, grocers, airlines, etc – there are a few major competitors and that's about it. It's very difficult to start a competitor, often for regulatory reasons, and most smaller competitors end up getting bought out by the bi…

There's a fascinating cultural history of accepting cartels/oligopoly in Canada. I've heard it described as an "Us Against the Vast North" attitude that prevailed as the British settled Canada. Also, I believe Canada's merger laws are very different from the USA's. We (in Canada) didn't check whether a merger is better for customers, the standard was to check whether it was good for shareholders. I believe this is ch…

Mergers have been challenged based upon free market competition for decades, and likely longer. Many mergers go forward with government imposed conditions.

Re: Project Hammer: reduce collusion in the Canadian grocery sector

#110

Post by scohesc »

Scoundreller wrote: post #96
winddude wrote: post #74

Earlier quoted context omitted.

or shopping carts in the store, need to cut down on the number of sorries.

No idea why people do not follow standard traffic conventions for right of way with a shopping cart (or while walking in general)

It's honestly mindboggling.

You're moving a four-wheeled vehicle down an aisle, with enough room for 2, maybe 2.5 cart widths. Yet people decide to stop right in the center without considering that they might be blocking someone.

But I'm the jerk if I point it out.

People are so silly (myself included)

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