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Robert MacCulloch
Robert MacCulloch is a native of New Zealand and worked at the Reserve Bank of NZ, before he travelled to the UK to complete a PhD in Economics at Oxford University.
Many years ago a chap from a well-known business family in NZ told me that he’d found out what the person was making who owned the franchise for the local supermarket not far from where I live. It was in the millions per annum. That’s just one store.
Franchise owners have been keeping their heads down in Kiwi society since the amount of money they’ve been making has been embarrassing, even to them. Down in Westhaven Marina in Auckland, I have it on good authority that a bunch of the biggest boats are owned by supermarket franchise owners. Why should we care? I’m totally cool with people making lots of money when they have worked hard and furthered society with productivity enhancing innovations. Who would begrudge Peter Beck of Rocket Lab his fortune? But folks making money out of owning a duopoly supplier of essential food items? Give us a break.
The High Court judgement [last] week, touted by the Commerce Commission as a great success (it fined Foodstuffs North Island $3.25 million for imposing anti-competitive land covenants to block competition), was quite the opposite. It will have the company and franchise owners laughing all the way to the bank. There are over 300 Foodstuffs stores in the North Island, so that represents around $10,000 per store. Golly gee whiz. That’s not enough to stock the fridge on one of their boats. Has the government gone mad? Has the Commerce Commission gone mad? Has the Wellington judge gone mad? Do they have any idea of what a joke fine has been imposed?
The judgement sends a message to everyone contemplating creating a monopoly in NZ – go for it. The worst that can happen is you get caught, in which case you pay a fine representing an inconsequential amount of the money you have made.
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This article was originally published by Down to Earth.Kiwi.
