Kaufland was fined for "abusing significant market power in the market" - but the absurdity of this fine points to the much more serious roots of the whole problem: we are killing our own future with similar steps.
String Kaufland got a fine. For what? That it would be for expired meat? Low-quality food? Theft? No.
Kaufland agreed with suppliers on payment deadlines for deliveries that were longer than 30 days. Both the customer (Kaufland) and the suppliers agreed to this deadline and Kaufland complied with the agreed deadlines. So he got fined for it. For paying for deliveries.
Does it sound absurd to you? Definitely me.
The Antimonopoly Office claims that Kaufland is abusing its "significant market power". According to Food chambers it is a confirmation of the existence of "distorted supplier-customer relationships".
Where does the "market power" of the Kaufland chain come from?
Market power is basically a picture of profit. How is a profit made? So that someone considers yours service useful and willing to pay for them - and your costs are lower.
Kaufland's profit came from the voluntary decisions of many customers. It is not black magic and the evil of the devil that create profit, and therefore market power, but the judgment of customers. Kaufland offers services and offers them obviously well. That's why he makes a profit. And that's why it has market power.
"Significant market power" is thus an admirable thing, if it was obtained on the market through a voluntary exchange. Why? Because it is a sign that many people have voluntarily chosen that the incredible competition of infinity of goods and services is Kaufland is the best deal for their money.
Kaufland could not force its sales (such as the state), it did not stand with a pistol in the hands of its customers. No, Kaufland its customers convinced by the quality and price of his services to bring him voluntarily came and voluntarily they exchanged their money with him.
Kaufland is not to blame. If you don't like that profit, complain about it customers. They themselves decided to make that profit.
How is it that Kaufland is "so good" in providing services that it makes a profit? One of the methods used by Kaufland is to negotiate with suppliers longer payment periods for deliveries.
Kaufland can thus purchase nominally more expensive products and sell them at nominally lower prices than other chains - longer maturities reduce the real price, which de facto increases real money income.
Suppliers then live in a world of "higher risk". They do not have to reduce their nominal prices - they sell products "all the same", they just wait for the money for a longer time. Although the nominal profit is the same, the real profit is lower.
If suppliers want to raise their money sooner, there is nothing easier than lowering real prices - reduce nominal prices or supply higher quality products at the same prices. In other words, it is the work of suppliers streamline production, to be "better than others".
And who would make money on it? Who else but the customer, as before. And through competition, we all in our role as consumers.
Clerk and hard work
Who could complain to Kaufland about the voluntary agreement?
It could be a competing retail chain or just one of the suppliers who was dissatisfied with those due dates.
If the state did not interfere in voluntary agreements, in the absence of an antitrust authority, a competitive retail chain would be forced to streamline and improve its customer serviceto be able to compete with Kaufland.
Dissatisfied supplier he could then either refuse to cooperate further with Kaufland or, under pressure from competitors who would like to push himself in his place in the event of the original supplier leaving, he would have to improve your offer (reduce the nominal price or increase the quality) in order to force shorter maturities or a higher real price.
Today, however, there is an easier solution for the competition: a solution of strength. All you have to do is go to an official who, from his position of power, decides that voluntary agreements are bad and Kaufland slaps his fingers. Innovation, streamlining, all this is challenging. It is easier to complain to the state. And it will again be the customer who pays.
Poor people farmers
You may argue that "what about the poor farmers, who will end up due to chain pressure and increase unemployment?"
We must realize that the real "righteous world" is not only about profit, but also about loss. Profit informs us that we do what we do right and usefully - we do not consume resources as a result, but we create them.
Loss on the contrary - it tells us that we are wasting resources and if we do not improve, it will be better to do something else.
Our whole life is a way of balancing between loss and profit, it is not just about monetary expression.
If "our" farmers are simply not able to compete and fail, while other farmers are able to supply their goods without any problems at given prices, that means only one thing: our farmers are worse off in "farming" than others. Resources are wasted, and if they are unable to function more efficiently, it has been much more beneficial for all of us to do something different.
Many people are lamenting about people who may lose their jobs, over farmers who will lose their farms, about 'their lives'.
Who will stand up for the future?
But no one complains about those who do not get a new one, maybe a better one work, no one laments those entrepreneurs who do not start a business. No one stands up for those whose dreams will not come true, simply because we have forcibly blocked scarce resources in unproductive industries.
When one industry dies naturally (as in our country agriculture), it means that resources have been freed up for the emergence of new industries. When we keep one naturally dying industry artificially alive, we are killing the newborn of the future.
Why - like farmers today - they do not defend defenders of the past tanners? Grooms? Telephone operators? TV announcers? Why don't they defend thousands of other professions in the same way, which no one else does today - that is, someone had to lose the job in the past?
Of course, a farmer in his fifties will find it difficult to retrain as an IT technician. But his children and grandchildren they are the ones who can be IT technicians and who - thanks to the eventual loss of their father or grandfather - see that agriculture is not the right thing for them.
But yes, it is much easier for politicians to defend what is and liquidate what could be. Populists are always looking for the easiest way to power. Those who will not do business in the future, who will not be IT technicians with a quality life in the future, but will instead live in the field and live on subsidies will pay for it.
It is absurd to defend protectionism over Czech farmers, with EU subsidies being distributed unfairly. The problem is the EU subsidies themselves, not their size. The distribution of subsidies is always unfair in some way.
After all, let the EU subsidize other countries more easily. Do you mind that other countries subsidize food for us, so we can focus on other production with greater added value? Not me.
Not only that, the fine itself is pointless for Kaufland and is only a manifestation of really unfair competition.
At the same time, it is a signal that any attempt to create a better future will be deservedly punishedwhile fraternizing with becoming a clerk will be rewarded at the expense of efficiency.
All those who defend subsidies to uncompetitive industries, those who seek to maintain protection over "traditional production," those who defend protectionism in any form and consequently i politicians and officialswho created an environment where Kaufland could get that absurd fine should be charged with a clear crime - murder. From the murder of the future.
And who should get compensation? All those entrepreneurs and employees who lost their opportunities because of them. However, it is a great pity that we can never know exactly who it was.