Tuesday, December 22, 2009

Price-Fixing at the Pump- Government style

A Quebec City judge has allowed a class action lawsuit to go forward against 11 oil retailers who are accused of price-fixing. It is alleged that prices were set through a series of phone calls made between the retailers. -CSP Link to read the entire article 

The mistake the gas retailers made was to undertake the scheme themselves instead of getting the government to help them fix prices.
They should have formed an association and lobbied the government to set prices at a level at which they could make more money.

Sound ridiculous?
That's exactly what the gas retailers in St. Jerome did when COSTCO moved in and started undercutting their price.

Here's a notice attached to the gas pumps at a Costco in St. Jerome;

Dear, Costco members,
The Regie d'energie of Quebec has recently imposed a 3¢ per litre increase on gasoline sold in St.Jerome.

We disagree with this artificial increase imposed on the citizens of St. Jerome for the benefit of gasoline retailers.
For this reason, we will be donating per litre sold, to the Fondation de l'hopital regional de St. Jerome.
Costco Wholesale will continue to supply members the very best quality/price value for all their purchases.

Pierre Riel

First Vice President and general director Eastern Region Canada

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