Project Hammer: reduce collusion in the Canadian grocery sector • Hacker News Board

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

#111

Post by surgicalcolor » Mon, Sep 09, 2024, 9:41 PM UTC

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…

Conversely, I think you're overestimating the technical capailities of Canadian federal or provincial regulatory organizations.

Government departments notoriously have serious technical debt, so while they might entitled to demand this kind of data, I sincerely doubt they are doing it with anything resembling modern data analysis. These orgs aren't going to have working data lakes, spark clusters or data warehouses on cloud infrastructure. They maybe have legacy SQL databases being pulled into spreadsheets.

So, while their data access might be better theoretically, I doubt they truly are able to even remotely analyze the data effectively. Data science in govt is notoriously poor outside of Statscan or other tech heavy departments.

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

#112

Post by surgicalcolor » Mon, Sep 09, 2024, 9:44 PM UTC

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…

yeah this is some ideological nonsense.

Loblaws and other companies have a lengthy history of illegal price fixing, monopolistic behaviour and other manipulative activity. Pretending that just more unregulated free market nonsense is going to help the situation is really naive.

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

#113

Post by juujian » Mon, Sep 09, 2024, 9:46 PM UTC

juliend2 wrote: post #3

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.

Good point. But is there an oligopoly in the Canadian real estate market though? I assume the premise of Project Hammer is that transparency applied on the food industry would underline some collusion and invite for a debate on whether there's some legislation to apply against such an oligopoly.

I'm afraid it might have the opposite effect - made collusion easier.

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

#114

Post by adamomada » Mon, Sep 09, 2024, 9:47 PM UTC

kaibee wrote: post #93

abdullahkhalids wrote: post #86

Earlier quoted context omitted.

Lowering prices together makes sense. But why would you raise your prices of a commodity product to match your competitor's? If they are going to raise, you hold and rake in the extra sales.

Do people really go comparison shop between stores? Like, I recognize that I'm coming from a more privileged economic position to not do so, but I still go to the cheap grocery store because it's the closest to me. I'd imagine that even for low-income people, it's the cost/benefit of comparison shopping has been squeezed out by how much prices change on a day-to-day basis. Like sure, if you're buying a lot of somethi…

Some people do, based on what I hear from my parents. It could be that seniors have more free time and are more astounded by higher food prices that the spend their time shopping at multiple supermarkets to get everything they want at low(er) cost.

Of course the time it takes to do this makes it all but impossible to actually save money, so it has to be a small portion of their customers.

I have heard that only something like 10% of customers actually give a shit about prices at all, and it is them who keep the prices in check for everyone else. i.e. with razor margins, the retailers can’t afford to lose that 10% customer base

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

#115

Post by abdullahkhalids » Mon, Sep 09, 2024, 9:48 PM UTC

kaibee wrote: post #93

abdullahkhalids wrote: post #86

Earlier quoted context omitted.

Lowering prices together makes sense. But why would you raise your prices of a commodity product to match your competitor's? If they are going to raise, you hold and rake in the extra sales.

Do people really go comparison shop between stores? Like, I recognize that I'm coming from a more privileged economic position to not do so, but I still go to the cheap grocery store because it's the closest to me. I'd imagine that even for low-income people, it's the cost/benefit of comparison shopping has been squeezed out by how much prices change on a day-to-day basis. Like sure, if you're buying a lot of somethi…

Why are stores changing prices so frequently if it has no impact on sales?

Yes, the vast majority of people don't comparison shop. But people do decide to not buy something if it seems it is too expensive and vice versa, and the effects are seen on the statistical level.

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

#116

Post by jlos » Mon, Sep 09, 2024, 9:49 PM UTC

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…

Canada is intentionally setup to produce oligopolies as a defense against large American companies:

"Canada was, in a lot of ways, built on monopolies — think about the Hudson’s Bay Company or Canadian Pacific Rail. Canada has always feared that if we don’t let our homegrown companies get huge, we’ll get swamped by American competitors. That’s why there’s a tension between Canadian politicians, who often say they’re pro-competition, and the law, which incentivizes consolidation."

I think this strategy work well-enough until about 20 years ago. And by well enough I mean Canadian consumers weren't in an ideal situation, but things were good enough for most Canadians. Now the oligopolies have become basically predatory, gobbling up goverment funds and market capture wherever possible.

Case in point: our Temporary Foreign Worker program (who now make up 7% of the Canadian population) have not only strained housing, healthcare, and the job market it has even been called a "breeding ground for slavery" by the U.N. [1].

[0] https://www.wealthsimple.com/en-ca/magazine/canada-monopolie... [1] https://documents.un.org/doc/undoc/gen/g24/120/97/pdf/g24120...

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

#117

Post by Fervicus » Mon, Sep 09, 2024, 9:49 PM UTC

aga98mtl wrote: post #16

fallingknife wrote: post #10

Why on earth are people and government stooges suddenly targeting grocery stores for collusion and price gouging? If there is an industry with a lower profit margin, I'm not aware of it.

I believe it is an elaborate psyop to shift the blame of inflation away from the government and toward a boogeyman, the "evil" grocery chains. As you point out the margins are super tight in food retail, it is impossible for it to be the cause of inflation. From the point of view of the average man however, the grocery store is exactly where he is facing inflation daily! This makes it the ideal scapegoat. The average…

And Canada is already lowering interest rates.

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

#118

Post by b112 » Mon, Sep 09, 2024, 9:49 PM UTC

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…

our agricultural products (dairy, wheat, maple syrup, and to a lesser extent retail beer and alcohols) are controlled by state monopolies who set prices.

Every sane government uses taxes, to ensure food independence. A country needs farms beyond all else. The US does this on the back end, using taxes to shore up pricing. One method the US uses is "government cheese", where their federal government buys megatonnes of milk, turns it into cheese, then gives it to welfare recipients. By buying up surplus, the feds keep the price of milk up.

Canada instead regulates milk pricing via quotas.

Both methods involve keeping the price artificially high.

The US follows suit in other markets too.

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

#119

Post by seabass-labrax » Mon, Sep 09, 2024, 9:49 PM UTC

delichon wrote: post #108

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 col…

Does that matter except as a philosophical question? The point of a free market in practice is to ensure that sale values are correlated with, and reasonably close to, production costs.

If an ostensibly free market is not producing competition which causes that to happen, it's a problem for society; then, it is society's prerogative to use whatever means appropriate to fix it. That could include, depending on the ideology of the society, loans and grants for new participants in the market, legislation that regulates pricing, specific taxation policies, or even rejecting the free market entirely and moving to central control.

By analogy, a mysterious violent crime case might need to be solved for justice to be attained, but it doesn't need to be solved in order for a society to improve and make itself safer generally.

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

#120

Post by semi-extrinsic » Mon, Sep 09, 2024, 9:50 PM UTC

acchow wrote: post #76

magicalhippo wrote: post #42

Top three grocery companies in Norway, which have almost the entire grocery market here between them, just got fined[1] for price collusion. They'd signal rising prices for a category by rising the price on certain products within that category, was one accusation. Extensive use of price scouts aided in this. Initially the fine was much larger, but ended up at about 450M USD total between the three. For comparison, t…

For how many years did this collusion last? What percentage of their annual profit could be attributed to price collusion? Norgesgruppen's 2005 annual report shows a profit margin of 2.2%. In 2021, that ballooned to 3.8%. That's almost a 75% growth in margin.

Their reported profit margins are also super suspicious, TBH.

Because the grocery chains have subsidiaries that are almost always the owner of the real estate where the stores are located. So they can just set the rent cost of the store in order to get whatever profit margin they deem acceptable.

Then the real estate subsidiary turns around and spends most of their profits buying more real estate. You see it almost everywhere now, grocery subsidiaries buying up whole blocks of nice hhouses, just to demolish them and build ugly concrete cubes with yet another grocery store on ground level and stacks of tiny apartments on top.

The best thing that can be said about these buildings, is that hopefully teachers in a few decades can use them as clear examples to show children just how bad it gets when we let rent seeking MBA fuckers decide things.