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article imageOp-Ed: The great cheese conspiracy

By Alexander Baron     Aug 10, 2011 in Business
David Icke believes there is a conspiracy by giant lizards to enslave the world by abolishing cash and implanting microchips in the backs of our necks, but he has overlooked a far more sinister threat: the plot to rig the price of cheese in Britain.
Way back in 1776, Adam Smith wrote in The Wealth Of Nations: "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."
Conspiracy was not new even then, there was the Gunpowder Plot, and way before that, the murder of Caesar; now there is, apparently, a group of supermarkets and cheese processors intent on rigging the price at the till. Today, the Office of Fair Trading announced fines on four supermarkets and five dairy processors for “infring[ing] the Competition Act 1998 by co-ordinating increases in the prices consumers paid for certain dairy products in 2002 and/or 2003.”
And how was the dastardly deed carried out?
“This co-ordination was achieved by supermarkets indirectly exchanging retail pricing intentions with each other via the dairy processors - so called A-B-C information exchanges.”
There you have it, the supermarkets told their competitors what they were likely to be charging in the future. Curiously, supermarkets do the same thing all the time in a much bigger way, in particular, they run advertisements in various media promising the public bigger discounts, fairer prices, better quality goods, and a wider range of products.
The OFT is a statutory body; it was set up in 1973 to protect the British public from dodgy dealings, rip offs, and so on, which is all good and fair. It also carries out research, and is a watchdog with teeth. Unsurprisingly, not everyone is happy every time it bites. Tesco is one of Britain’s largest supermarkets, one of “the big four” who between them have a combined share of around three quarters of the UK grocery market. It was also one of those fined for alleged offences dating back to 2002, a staggering £9.55 million, which will probably account for its net profit on all its dairy products until the next decade.
Lucy Neville-Rolfe of the supermarket’s Corporate and Legal Affairs department lost no time in voicing some strong objections to this announcement: "We are disheartened and disturbed that the OFT continues to pursue this costly and time consuming case at the expense of both the tax payer and UK business. This is all the more surprising given that the OFT itself said that ‘competition in the supermarket sector is generally intense and has delivered significant benefits to shoppers’”.
She added: "We surely have now reached the stage where the absurdity of the OFT operating as investigator, prosecutor and judge cannot be allowed to continue. The Government’s plans for the new competition regime must address this anomaly, in the interests of the consumer and the business community."
This has the ring of truth, not to mention common sense. How would any member of the public feel about the police having the power not only to investigate alleged crimes but to prosecute, and act as judge and executioner with no right of appeal? And on the subject of sentencing, where will this £49.51 million go, into a fund to rehouse the people left homeless after the recent urban riots, or towards servicing the interest on the irredeemable national debt?
What no one at the OFT seems to realise is that a cartel, any cartel, can only be maintained in the final analysis by legislation, otherwise somebody always gets greedy and breaks it up; Murray Rothbard provided a compelling analysis of this in a 1984 speech at the Mises Institute.
There is very likely another reason for this ludicrous campaign against the supermarkets; bizarrely, many people see them as parasites and exploiters of the working class. This dates back to at least the 1930s when the British Union of Fascists published a pamphlet called Menace Of The Chain Stores. The reality is that while supermarket chains do indeed generate massive incomes they also have little things called overheads. They work on very narrow profit margins at times, and stock, import, distribute, and even manufacture an enormous variety of foodstuffs and household products. Many are open extended hours including Sundays, and a few are open 24 hours a day. Surely any organisation that provides such an invaluable service to the public is entitled to make a few dollars for its shareholders?
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
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