Japan’s Fair Trade Commission has raided four major ice cream manufacturers over allegations of price-fixing. The firms, including the Japanese arm of Unilever and three domestic producers, are accused of colluding to keep prices artificially high. This is a stark reminder that even the most trivial of pleasures cannot escape the long arm of antitrust laws.
The raid, which took place in Tokyo and other locations, involved multiple offices and seized documents. The investigation follows complaints from retailers who claim the companies agreed to stop discounting products. This stinks of a cartel.
In a country where deflation was a chronic disease for decades, fixing prices on a treat like ice cream seems almost quaint. But make no mistake: price-fixing is a tax on the consumer. It distorts markets and punishes the thrifty housewife.
Across the globe, the UK Competition and Markets Authority (CMA) has been praised for its similarly aggressive stance. Unlike the laissez-faire approach of some governments, the CMA has shown teeth. It recently fined several banks for rigging the bond market.
Some critics argue it goes too far, that it chills legitimate cooperation. But I say good. In a world where capital flees to where it is treated best, a robust regulator actually attracts businesses.
It says: we play by the rules here. The bottom line is this: if you can't compete on price without colluding, you don't deserve to survive. Let the market decide, not a backroom deal.
The ice cream raids in Japan are a sweet victory for competition.
