Competition

It is generally argued that competition is good for consumers and that it is very important to ensure that free competition is maintained in the market place because it leads to the best results for everyone. It is recognised that producers tend to want to minimise competition because it is in their interest to do that: and so there is quite widespread agreement that there should be laws against monopolies and unfair barriers to market entry etc. Where there is a natural monopoly many people accept that competition does not work and there are various answers to that: for the neoliberal the answer is to regulate so that there is a "market" no matter how artificially created and sustained (which is done by government and so is a rather curious hybrid of an idea): others think that essentials which are naturally a monopoly should be state owned and thus a mixed economy is desirable.

I find the whole notion of competition a bit difficult to see in a positive light and I am not sure whether that is because of the logic behind it, or because of its failure in practice.

At the weekend I went to buy soap powder and this was in my mind. The first problem with competition is that I have no real choice of supermarket. In all directions from my house the nearest supermarket is a Morrisons. I am not counting Waitrose because, although it is a supermarket of sorts, it is, and promotes itself as, an upmarket shop, much like M&S. Mainly it sells expensive food, and the other products are secondary. It is relatively new in my area, having taken over a Morrisons which was too small for that company's strategy. Anyway, in terms of choice of shop I can go to Morrisons or Morrisons. Or I can go to the small independent corner shops or to Waitrose. Or I can drive for several miles to get to some other supermarket chain. This is not because I live in a peculiar place: my mum lives in a different town and she can go to Sainsbury's or Sainsbury's. This is the reality in this country for very many people. There is no real competition between the big supermarkets because of how they choose to locate themselves. There is some change with the introduction of the small "metro markets" but they are not priced like big supermarkets: they are priced much like corner shops ( with flashy promotions as an inticement) though they presumably benefit from economies of scale in terms of purchasing power and centralised distribution: if I am going to pay those prices and use several different shops to get what I need I would rather support the small independent shops: maybe that is just me. But for things like soap powder I do not want to pay extra and I have been persuaded that on balance the supermarkets are cheaper (not actually checked that but I do know that for the things I buy there the supermarkets do vary in price and Morrisons is middle range: Asda and Lidl and Aldi are cheaper: Sainsbury's is dearer). In theory I should be able to choose any of these: in practice I can't.

So I went to Morrisons. I was then faced with a choice. I could buy Persil or Surf or Lux or Ariel or Daz or Bold or Fairy or Ecover or Morrisons own brand: and all of those came in the form or powder, biological, tablets, gels etc. So I am very well equipped with consumer power, which is one argument adduced in favour of competition.

Snag is that 7 out of 9 of these are produced by Unilever or Proctor and Gamble. I suspect that Morrison's own brand is too: but I can't prove that. I don't know who makes ecover. Does not look like free competiton to me: looks like oligopoly disguised by branding. So how am I getting the benefits of competiton in terms of price or choice, exactly?