Producers Still Hate Competition

Tyler Cowen at Marginal Revolution thinks this story might be a parody.   Here’s the gist:  a Berkeley store has decided to compete with its fellow merchants.

The relationship between the new management and the community seems to have got off on the wrong foot soon after Fujimoto left. Before long, the small local merchants were hearing reports from customers that Monterey Market was selling the same specialty products as they were, but at lower prices.

“We only have a 30% mark-up”, said Ng, adding that she doesn’t understand how Monterey Market can sell the same products so much more cheaply.

So, are they saying that Monterey Market can’t sell the same product?  Not at all.

Asked why Monterey Market should not have the right to pursue a business model that includes selling what it wants, Ng said:  ”Sure, but they don’t have to carry exactly the same products. It’s not that there was no competition before — we carried some of the same items — but we had matching pricing,” Ng said.

And the story doesn’t end there.

The decision by Monterey Market to stay open on Sundays, which it started to do in November last year, has also had a direct impact on sales, according to Ng and Rosales. In the days of Bill Fujimoto, opening hours used to be coordinated among the merchants, according to Ng.

Same products, lower prices, greater convenience.  Sounds like competition to me.  And producers still hate it.