Christmas time is behind and good children have certainly received
gifts or toys from Santa Claus. But despite his goodwill, Santa is
having more and more hard time delivering the goods because of over-regulation,
especially in countries like France.
France indeed is one of the champions in regulating retail trade and
shopping. The government – instead of shop keepers and owners – is
deciding, for example, not just openings on Sundays, when sales periods
are to begin and to end. It also strictly regulates relations between
manufacturers and distributors.
And here is where the regulatory nightmare of Santa Claus really begins.
Whatever the prices of his toys – whether different or the same from one
shop to another – Santa Claus is going to be wrong!
First, if different, Santa Claus may be prosecuted under the so-called
Galland Act which sets "ceiling" prices prohibiting the sale under a
certain bureaucratically defined level. It also forbids so-called "discriminatory
pricing." Logically, to avoid being prosecuted, Santa Claus' suppliers
respectfully tend to follow the same prices, the same discounts and even
the same sale conditions.
How can French regulators expect – unless they really believe in Santa
Claus miracles – that suppliers of toys would offer advantages and lower
prices to a distributor, if other distributors could demand the same
favourable conditions under the law? Similarly, how can they believe
that a distributor would negotiate better deals for its customers if any
of its competitors could get the same favourable conditions by invoking
"discriminatory pricing"?
Despite this regulation which obviously blocks competition between
various distributors, preventing them from negotiating lower prices and
better sale conditions for consumers, there is still some of it among
distributors.
Because they cannot compete on prices, Christmas consumers are instead
being offered loyalty programs that provide reduced-price coupons or
customer rebates and discounts – for example Carrefour, the giant
retailer, gives its loyalty cardholders 25% off the price of about 100
toys.
Yet even while his retail representatives abide by the absurd Galland
Act and mark their goods with identical prices, Santa Claus is
unfortunately not out of trouble. He is then an easy target for consumer
advocacy groups and anti-trust regulators; the latter have just
inflicted fines of 37 million euros on a group of producers and
distributors of toys in France. For what reason? Santa Claus has been
fined for having practiced and agreed on the same prices across
different French shops!
Agreements on identical prices for the same toy indeed do not in
themselves hinder free competition: isn't such pricing indeed applied by
any manufacturer selling directly to consumers, a bewildered Santa Claus
may rightfully object?
Moreover, there is actually no benefit from such fines for the consumer
who will have to support their consequences at the end of the day
through less choice or higher uniform prices.
French regulators really do their best to make Santa Claus' Christmas
mission Kafkaesque. When will the French realize that Santa Claus really
doesn't need all their government's over-regulation, if they want him to
offer higher-quality and lower-priced toys to their kids? On the
contrary, what he needs in France is real deregulation!
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