Yes Gus. 

Seems like petrol prices have
been relegated to the bottom of the garden, along with the fairies. 

Just like the serious interest
demonstrated by our fearless watchdog, the ACCC, on banana prices, in the wake
of Cyclone Larry (see my complaint & the ACCC’s response below). 

And I reckon that the ACCC’s logic could readily be applied
to the proposed new Cross Media laws. News Ltd is the "dominant"
& price leader & the smaller media moguls the "followers". 

As to how that can lead to diversification in the media,
only Helen Coonan would know. But then, I bet it’s been a while since Helen was
in Woolworths or Coles either. 

--------------- 

From: John Richardson
Sent: Wednesday, 29 March 2006
8:41 PM
To: Infocentre
Subject: Complaint form submission 

29th March 2006

Retail Coles & Woolworths 

To whom it may concern. A news
report in today's Sydney Morning Herald, titled "Prices go bananas"
(see link http://www.smh.com.au/news/business/prices-go-bananas/2006/03/29/1143441202767.html)
reports that a Coles Myer spokesman had confirmed that Coles stores were
selling bananas for between $4.98 and $5.98 around Australia. 

Later in the same article, a
Woolworths spokeswoman is reported as saying that the retailer's price for a
standard bunch of bananas was now about $4.98 a kilo. Given that Coles Myer
& Woolworths account for more than 70% of banana sales in Australia, their
reported reference to a common selling price, particularly in a volatile,
post-cyclone Larry market, would seem to be more than a coincidence &
worthy of investigation, in the interests of consumers. 

Thank you.

The ACCC replied today ….. 

Dear Mr Richardson,  

Thank you for your email of 29 March 2006 to the
Australian Competition and Consumer Commission (ACCC) regarding price matching
by supermarkets. 

The ACCC is a Commonwealth
Government agency that administers the Trade Practices Act 1974
("the TPA") for the purposes of protecting consumers and encouraging
a fair and competitive business environment. 

Section 45 of the TPA prohibits
anticompetitive agreements (agreements between competitors) that have the
purpose, effect of likely effect of substantially lessening competition in a
market in which the businesses operate.  

45A of the TPA contains an
outright prohibition on contracts, arrangements or understandings between
competitors in relation to prices regardless of the effect on
competition.  This includes agreements which purport to ‘recommend’ prices
but which in reality fix prices by agreement. Some joint ventures and
collective buying groups are excluded from this provision. 

Generally speaking, businesses in
Australia are free to set their own prices on goods and services as long as
they do it independently (i.e. without consultation with their competitors to
set prices at a certain level). 

Sometimes the selling or buying
prices of competing businesses will be set at the same level so that the price
fluctuations of one are matched by equivalent fluctuations in the others. 

Although this may seem like
collusive behaviour, there can be legitimate commercial reasons such as highly
visible factors affecting prices (eg Cyclone Larry) which prompt competitors to
quickly adjust their prices to match price movements, or there may be a single
dominant firm which has lower costs than others. In order not to be undercut,
the others match the price of the dominant firm. The dominant firm becomes a
'price leader' and the others 'price followers'. Retail price information is
ordinarily not secret, and awareness of a competitor’s prices does not
automatically mean a firm is colluding with that competitor. 

Without any evidence of an
agreement or meeting of minds between competitors it is unlikely that a breach
of s45A of the TPA could be established. 

Thank you for contacting the ACCC
with your concerns and I have logged details of your email into the ACCC’s
confidential national database. 

Yours sincerely,

David

ACCC Infocentre

1300 302 502

And this from yesterday's Crikey .....

'One of the roles of the ACCC is to enforce any actions of misleading and
deceptive conduct committed by business. However, it seems like the ACCC is so
busy regulating Telstra and considering the many mergers and acquisitions
happening at the moment that poor consumers are getting forgotten.

An
example of misleading and deceptive conduct that seems to go unnoticed is the
common practice of businesses advertising a product for a certain amount after
the consumer claims cash back from the manufacturer. The clearest example of
this behaviour is Officeworks and Hewlett Packard's previous habit of
advertising products at $599.00* in very large type and beneath it, in far
smaller type, at $699.00. The HP product does not cost actually $599.00. Rather,
the consumer is required to pay $699.00 to Officeworks and later claim a $100.00
refund from HP.

This is where things get tricky. Neither Officeworks (at
the point of sale) nor HP (in the product packaging) provide any guidance as to
how the consumer would receive the refund. Rather, the consumer is required to
call HP and actually request a refund form (the form is also able to be
downloaded on the HP website but is incredibly difficult to locate).

After the form is obtained, the purchaser is then required to fill in
three pages of information (including a bank account to which HP can refund the
money) and send the form back to HP. A consumer would have a fair case to argue
that the HP product purchased from Officeworks does not cost $599.00. To receive
the $100.00 refund, the consumer needs to call HP, spend an hour filling out and
posting the form, have a valid bank account and then wait for upwards of five
months before receiving a cent.

Of course, it is highly unlikely that
any consumer would bother to take action for the sake of a few dollars – HP and
Officeworks know this. That is exactly why they are able to commit the alleged
misleading and deceptive behaviour and be comfortable in the fact that it is a
virtual certainty that the ACCC will not so much as furrow its brow. This is
despite the ACCC noting on its website that “businesses should focus on the
overall impression given to the consumer, especially when using techniques such
as asterisks and associated fine print”.

In fairness to the consumer
watchdog, its resources are limited. The ACCC is not able to enforce every
breach of the Trade Practices Act, especially the minor ones – it has its hands
full at the moment with the spate of mergers, as well as investigations into
Telstra. As a result, big business knows that so long as its behaviour is not
too dodgy, it can get away with a degree of potentially illegal, immoral and
lucrative conduct.

Perhaps a solution could be to split the ACCC into
ACCC Wholesale and ACCC Retail. The bodies would be run and funded separately.
The wholesale section, which could continue to be governed by Graeme Samuel,
could have power to approve mergers, industry regulation (such as gas and
telecommunications) and monitoring anti-competitive conduct (cartels). By
contrast, ACCC Retail could focus on the real consumers, prosecuting big
business for smaller offences, such as misleading and deceptive conduct. 

From the ABC

Today

Oil price continues to depress US market

US stocks fell on Tuesday for a third day as investors worried that a sharp rebound in oil prices would hurt consumer spending and corporate profits.

The Nasdaq has lost about 2 per cent since Thursday, its most pronounced slide in almost two months.

Leading the Nasdaq's decline were Internet stocks such as Google Inc and semiconductor shares such as Applied Materials Inc on concerns about slower corporate technology spending.

The Nasdaq Composite Index was down 22.92 points, or 0.98 per cent, at 2,310.35.

From the ABC

Yesterday

Oil prices boost US market

US blue chips have edged higher in overnight trade as rising oil prices helped lift energy shares such as Exxon Mobil but weighed on the broad market.

US crude oil futures prices gained 2 per cent on supply concerns related to tensions over Iran's nuclear ambitions.

An index of oil producers' shares rose 1.42 per cent.

The Dow Jones industrial average rose 21.29 points, or 0.19 per cent, to end at 11,141.33.

read more conflicts at the ABC

From Al Jazeera
Stock crash shatters Saudi dreams

Wednesday 03 May 2006, 16:12 Makka Time, 13:12 GMT

An attempt to spread Saudi Arabia's oil wealth through mass share ownership has ended in tears for many ordinary Saudis after a stock market crash.

It was meant to be Saudi Arabia's bold effort at fairly distributing the vast wealth of another oil boom.

But hundreds of thousands have had their fingers burnt in a stock market crash since February that has sheared 40% from the value of the Arab world's largest bourse.

In the past three years, up to nine million Saudis, or half the population, have started playing the market in the conservative desert state, whose strict brand of Islam outlaws standard forms of gambling.

They were encouraged by a government which hoped the bourse would enable citizens to share in the economic boom that has come with a rise in world oil prices not seen since the 1970s. It hoped that would help to iron out some of the country's huge disparities of wealth.

________________________________

How come when the price of petrol goes through the roof, the Saudi are loosing their pants on the stock market...

From the ABC

Motorists warned of petrol price squeeze
There are warnings for motorists that fuel prices could be as high as $1.50 per litre by next week.

Oil prices in the US reached an all-time high of $US75.40 per barrel this week as a result of global conditions.

Beth Ann Bovino, from Standard & Poor's, says the market has jumped on missile tests by North Korea and political anxiety about Iraq and Iran.

"The geopolitical risk premium that's added to oil prices is now probably between adding about $US10-$US15," she said.

Geoff Trotter, from industry consultants FUELtrac, says the price hikes will flow through to Australian bowsers in about a week's time.

"The full impact of that won't be felt until next week, and that increase should flow through in relation to about a 3- or 4-cent-a-litre increase at the pump," he said.

Price discrepancies
Australian motoring groups say during Hurricane Katrina, which caused the price of crude oil to rise when it hit the US last year, the gap between oil prices and the cost at the pump widened.

Lauchlan McIntosh, from the Australian Automobile Association, says that is happening again.

"When we look at the numbers and look at the data, unfortunately, we're tending to be misled a bit by the general view that it's all because of the oil price rise," he said.

"It's not all because of the oil price rise, it's because the margins are progressively increasing over time - by the wholesalers, the refiners and the retailers."

Motoring groups say rising prices will add to inflation, raising the chance that the Reserve Bank will increase interest rates next month.

Mr McIntosh says it is all the more reason for the Australian Competition and Consumer Commission to take a more aggressive role in the fuel industry.

"They make these general, sweeping statements that there is no anti-competitive behaviour going on," he said.

"That may be the case, but what's clearly happening is the margins are increasing."

Further rises
Ms Bovino says she is concerned that the added impact of demand from China, a shortage of refineries and the American driving season, could see oil prices rise toward more than $US100 per barrel.

But Mr Trotter says that is unlikely to happen without help from speculators.

"The hedge funds do play a very important part," he said.

"There's been speculation by a number of them to try and talk the price up, as it were, in the order of US$100 a barrel.

"They haven't achieved that, but any piece of bad news is good news for them."
---------------

Gus pumps: Hedge funds are like most media outlets... The more bad news on the horizon the more they can sell bad news... As a famous author in 1850 once said: "Newspapers feed on the carcasses of tragedies."