Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

Reactions to the endives cartel

with 3 comments

The French Autorité de la Concurrence has imposed a fine of 3,6 million euros on four French endive growers for their participation in an endive cartel.

The news has attracted the interest of our readers, who have sent us several emails suggesting a post on this story. The interest of our readers on endives has matched that raised in the past by the Dutch investigation on erotic toys and costumes. Weird.

The news has spurred interesting reactions from some experts. “This case proves that what competition law/economics considers in the interests of consumer welfare (low prices, lots of endives) does not necessarily equate to what society (or the students at the College of Europe in Bruges) would consider consumer welfare!”, says Grace Aylward.

Some background: Grace studied as the same time as me in Bruges, and we both share the suspicion that all of the French and Belgian stocks of endives are regularly served to the students at the College of Europe. There is no other plausible explanation as to why endives featured in the menu every other day.

Consulted about this phenomenon, Napoleón Ruiz (who also claims to have been affected by overfeeding of endives in Bruges) said to Chillin’Competition that “the decision of the Autorité de la Concurrence will have the effect of enhancing the dominant position of endives at the menu of the College’s canteen“.

“They are disgusting; I can’t stand them” said Mark English.

Mr. English directed us to another competition lawyer Alex Papanikolaou (“ask Alex; he was a real canteen presence”, he said). Mr Papanikolaou seems to share the opinion of his peer: “Hard to believe people would buy and consume these things at any price, let alone at cartelized prices“, he says.

A legal director at a high-tech company who requested anonimity said “they are as bitter as the country where they’re grown. Anyone buying them deserves the overprice”.

A partner at a Spanish firm says “the Bundeskartellamt should imitate the French Authority and investigate manouvres by German growers of cucumber to impede imports of Spanish cucumber. Why focus on endives when you have cucumbers?”

Please comment on this post if you also have an strong opinion on this investigation.

P.S. For further information on endives click here. For the role of Belgian endives in US politics click here (I’m not joking; and I bet this is the link that you’ll click the most). For recipees featuring endives, click here.

Written by Alfonso Lamadrid

7 March 2012 at 9:08 pm

3 Responses

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  1. It would seem that the last glimmer of hope for College of Europe students is that endives are a so-called Giffen-good. Giffen-goods are undesirable products which financially restrained consumers purchase in large quantities only because of their cheap price tag. If a purchaser with limited financial means feels compelled to consume large amounts of such goods, a price rise may paradoxically lead him to consume even larger quantities after prices have gone up: The price increase weighs so heavy on his budget that more desirable foods become even less affordable than before.

    In 1895, Alfred Marshall explained this phenomenon as follows: “As Mr Giffen has pointed out, a rise in the price of bread makes so large a drain on the resources of the poorer labouring families and raises so much the marginal utility of money to them, that they are forced to curtail their consumption of meat and the more expensive farinaceous foods: and, bread being still the cheapest food which they can get and will take, they consume more, and not less of it.”

    In short, if endives are a Giffen-good for the College of Europe, then the expected price decrease after antitrust intervention might free significant financial resources. The College cafeteria can invest these freed resources in more pleasant food offerings, reducing the need to buy endives. (I wouldn’t bet on it, though: unfortunately, Giffen goods are as rare in the real world as endives are on my dinner plate.)

    Hans Zenger

    7 March 2012 at 9:40 pm

  2. And I confirm that College of Europe students keep suffering from the unbearable bitterness of endives. The canteen looks desolated when “the product” as some of us call it, is served. I have the student representative for the canteen by my side, let’s see whether he can end this agony.

    Curian

    7 March 2012 at 9:45 pm

  3. No translation for this … “¡Estás sembrao!”

    Anonimous

    7 March 2012 at 10:48 pm


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