Oil's got one
. So does cocaine
. There used to be one for light bulbs
and another for uranium
. While we know one currently exists for diamonds
, some folks think the music industry
An effective cartel
product homogenity and a relatively limited number of suppliers.
Standardised products offer consumers price reductions driven by economies of scale and supplier substitution effects. However a relatively small number of suppliers of any commodity gives rise to the possibility of price fixing and collusive behaviour.
Supplier actions threatening financial disadvantage to consumers can occur in any
industry, however who would not
view food cartels negatively?
We last saw food cartels in the 1990's [e.g., but not limited to lysine
[.pdf], citric acid
, vitamins A & E
]. Aggressive antitrust actions, coordinated across the EU and America, effectively levied fines in excess of $10 billion dollars on some 167 international cartels
[.pdf] operating at the time.
With global food prices already at record levels
, will any good come from Thailand's moves to organise a rice cartel
? While some are skeptical
this (latest) effort will succeed, comments from government spokesmen "With the oil price rising so much, we import expensive oil but sell rice very cheaply and that’s unfair to us ..."
aren't very helpful to already nervous consumers.
The idea of a rice cartel isn't new; India suggested forming a rice, tea and sugar cartel
in 2000, only to have the initiative die due to the difficulties of controlling rice production.