July 27th, 2012
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Oh and by the way, anti-cartel office says it’s okay with cartels

melon-heads

Finally this week, a little economic regulatory tragicomedy. A few years back, a friend was stunned to discover that his company was being fined by Hungary’s Competition Office (GVH) for anti-competitive practices. His offense? After his firm raises their prices, some of his competitors did the same. Even the GVH admitted there was no evidence of price-fixing, as no price-fixing had gone on. At the time, this struck me as more than a bit outrageous. Now an apparent decision by the GHV to stand aside as some firms openly engage in cartel behavior makes it seem that much more shocking and disgraceful.

The current case in question involves watermelons, and an agreement that melon-farmers and supermarket chains made to not sell melons for less than HUF 99 per kilo, in order to appease the country’s politically-influential and violence-prone melon farmers. (If you think that I am exaggerating when I say “politically-influential and violence-prone melon farmers,” recall that this past May, a former MP reportedly tried to kill himself after getting into trouble for extortion over a protest involving melon prices.)

On Monday, Gyula Budai, the state secretary at the Rural Development Ministry (on right, holding melon) told journalists that he had talked with the chairman of the GVH, and based on their discussions was confident that the anti-cartel office wouldn’t act against the watermelon cartel. Even though it is a cartel. Oh, and get this: This is the same Gyula Budai who also serves as the government’s “accountability commissioner,” meaning the person who is charged with making sure that state administration doesn’t give special interests special favors. [index.hu]

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  • David

    About six years ago all the telephone companies started charging calls per minute as opposed to the per second charge. Now THAT is a cartel. It is against EU rules, but hey, welcome to Hungary.

  • Curious George

    If that’s the case, then it would be good if the new govt telecom provider pushes forth change by having per second charges. Somehow, I’m dont think they will.

  • ricsi

    Sour grapes Erik?

    • Erik D’Amato

      I don’t think opposition to unequal application of the law counts as sour grapes, though I suppose in a country where most people consider “corruption” to be when someone other than them gets a bribe, I guess it could be seen that way…

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