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Consumers Are Smarter than Bureaucrats Think

December 23, 2017 in Economics

By Lee Friday


By: Lee Friday

Despite the name of this government agency, Canada’s Competition Bureau lacks an appreciation of the nature of competition. Moreover, the Bureau’s actions can be seen as an insult to Canadians, as it fails to acknowledge the ability of discriminating consumers to recognize uncompetitive offerings. As the Bureau pretends to be the consumers’ guardian angel, it wastes taxpayers’ dollars on counterproductive activities.

The Hudson’s Bay Company (HBC) operates numerous department stores in Canada. They say they have spent more than US$425,000 and invested more than 6,500 person-hours to produce 37,000 documents in response to the Competition Bureau's complaint made last February. According to The Canadian Press, the Competition Bureau

is suing Hudson’s Bay Co., alleging that the retailer engaged in deceptive pricing practices for four years …

The Competition Bureau claims HBC misled customers over the prices of mattresses and box springs sold together since at least March 2013 …

“The regular prices of the sleep sets were so inflated above what the market would bear that sales at the regular price were virtually non-existent,” reads the filing.

HBC listed a Mount Royal tight top queen sleep set at $1,998 and then a sale price of $788 in 2014, for example, but never sold one at the regular price, the agency says.

So, HBC supposedly “engaged in deceptive pricing practices” which the Bureau defines as misleading customers about prices. Nonsense. The Bureau reveals its own bureaucratic idiocy when it contradicts itself by admitting that no sales were made at the inflated price.

Consumers are Wise

Consumers were not misled, as evidenced by their decisions not to buy! Why did they not buy? Because they know the market. They shop around. They have done their homework. They know the prices of the Bay’s competitors. They are well informed. And just as consumers were not misled by a ‘high regular price,’ they also would not eagerly embrace a ‘sale price’ unless they find the price more appealing than the prices of HBC’s competitors.

Though the government would have us believe this is a mortal sin, there is nothing wrong with HBC pricing its products far above the market. That is their right. Remember, they cannot force consumers to buy their products. All transactions rely on mutual consent.

In contrast, we must never forget that the government is the only institution that has the legal power to force consumers to buy things (via taxation and government spending) at …read more


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