This is a great thread, and it shows the power of smart, tech-capable citizens.
Consumers in Austria who travel abroad/to Germany often, already knew they were getting scammed for a long time now, but couldn't prove it and now they can, so the more important question is what will come out of it, as the data shows the big retailers clearly cooperating on price fixing.
My guess, nothing, as the government regulators who are supposed to watch over this, will find nothing wrong, as they're already bought and paid for to go work as lobbyists or "consultants" for these retailers once their stint in politics is over.
Why do I think this? Well, about 6 years ago, the 3 big telecom operators in Austria raised the prices together at the exact same time, and the government body in charge of overseeing these things said they have no proof that the 3 operators colluded together for price fixing and it could just be a coincidence, case closed.
The country is so corrupt, it's rotten to the core. As a consumer and taxpayer you are being legally fleeced form every direction with the blessing of the government, but this is probably true in many other countries.
Ask an Austrian hardware store owner why he doesn't sell food when he can supposedly undercut grocery stores and still make 5% profit on every item sold. I bet you anything he'll say that's bs.
your last sentence suggests that you don't believe that anyone can just undercut the big supermarket chains in austria. which is what i also don't believe.
but your first sentence is saying something different, so that has me confused.
It's bs that anyone not in the supposed cartel can suddenly make huge profits on food by undercutting. Gross margins on food are almost certainly very low. THERE IS NO CARTEL. There is no room to undercut. There is no evidence of illegal price fixing other than price go up. The only cartel is the Austrian government which is the cause of the price increases--not via lack of enforcement of laws but from carrying out their policies as written. This is inconvenient to the socialist talking point about corporations fixing the price of bread with impunity.
but i also do not agree with you that it would be trivial to sell food anywhere.
brand protection laws here (i found a source for germany, but i believe that this should be EU wide, otherwise it would be in violation of EU laws) do not allow you to sell a branded product without the permission of the brand owner.
so in order to sell something you have to negotiate with the brand. if you are a small shop you will not get the same volume prices as the big chains because you have no bargaining power. and if you already sell something else you will have to convince them that doing that combining that is a good idea. (i also think that you may need a license to sell food alongside other products, which may be denied. you can't just sell everything anywhere). the brands may also not be happy that you undercut the large chains they sell to as it may push them to demand lower prices from the brand in order to compete.
i also found one article that claims that "Territorial Supply Constraints" would allow brands to segment the EU along the internal borders and demand different prices per region.
it looks like that may be the real problem.
and while it may be possible to buy the products from a third party within the EU, doing so may may be difficult at scale and make it more difficult to undercut prices. and also the complicated legal landscape risks costly lawsuits, even if you would win.
why aren't the existing german chains in austria undercutting others? probably because they buy directly from the brand and so the brand can dictate where they sell.
Your bargaining power is that there are a dozen other food suppliers and tens of thousands of other common food items you could sell instead. No store is going to cry and go bankrupt because they can't sell Ding Dongs. Also, there are chains of hardware stores, chains of coffee shops, chains of everything which have additional bargaining power. And if the selling price is so high then everyone is going to be eager to push as much through the pipe as possible while the getting is good.
>the brands may also not be happy
Too bad. There is no shortage of food brands. This is not North Korea we're talking about.
>why aren't the existing german chains in austria undercutting others?
Probably because to do so would mean giving up all profit. That may in fact be illegal predatory pricing--using their position in the market to squeeze out less solvent competitors.
i think aldi is known for not selling otherwise well known brands. but from my memory hofer in austria is selling way more common brands than aldi in germany.
the discounters are known for selling brand products under a different label. i guess the brands go along with that because that way their brands higher prices elsewhere are not undercut because consumers don't recognize that it is the same product. in fact at least in the past brands dictated the retail price for their products, and discounters created house brands because of that.
that's why you don't see many otherwise well known brands in their shops. but from my memory hofer in austria is selling way more common brands under their original label than aldi in germany. (i could not find much data on this though, so this is a very subjective impression. i also haven't been shopping in germany for decades. according to wikipedia, aldi (south) has common brand products from 11 companies, whereas hofer has 10% of their 1000 products with common brands. and many of those are austrian brands. ok, i just found an article where aldi south also claims 90% own brands, but i guess in both cases that's not an exact number, so that's not very helpful)
so it seems austrians have a stronger local brand loyalty.
compare the house brands between aldi and hofer: https://www.aldi-sued.de/de/produkte/eigenmarken.html https://www.hofer.at/de/sortiment/hofer-eigenmarken.html
here you can see hofer boasting with their austrian products: https://www.hofer.at/de/ueber-hofer/qualitaet.html
why are there so many brands that are not shared by both?
i guess because austrians want products sourced in austria.
this is also true in business. austrian companies prefer to only do business with other austrian companies. when i suggested that i was looking for customers in austria i was told that having a company registered in austria was a prerequisite to be even considered.
this is probably because austrians see themselves as the underdog against germany, so they are very protective of their own and don't want to become dependent on other countries, especially not germany so they don't want german companies dominating the austrian market.
austrians wanting products from austria doesn't automatically make everything more expensive. it only makes it more difficult to open a store that attracts locals. stores with imported products do exist but they don't have many of the products that everyone wants.
I suspect that the language barrier is still real. But then again, German-speaking Austria experiences the same thing.
I wish we had a common European delivery service, like the US has US Post or DHL, with the same cost structure across the entire continent. We don't, a package from Spain to Czechia is much more expensive than within either Spain or Czechia.
A common European delivery service would give foreign e-shops a massive competitive edge. Suddenly, it would be more efficient to buy cheaper things in Slovenia or Bulgaria.
I've noticed a surge in Germans going to Turkish/Arabic food stores in the last few years.
If grocery stores were suddenly capable of 43 percent margins there would be absolute pandemonium in the markets and stocks would skyrocket. Retailers in every industry would be switching to food sales en masse. People would be flying food in by aircraft. You see just the opposite. Food retailers' stocks are down a lot year-to-date.
Government project tenders are often notoriously intransparent, as ironically evidenced by the fact that the government hasn't been able to stand up a price comparison database for months, as also mentioned in TFA.
The amount of cope in this thread is truly unfathomable. Just straight up economic illiteracy.
Stocks are fundamentally divorced from economic reality EXCEPT when a company ceases trading and several other rare administrative actions.
Predicting future hype is all that matters. Or time spent fractionally invested in all broader casino hype trains, e.g. VTI
I would love a citation for that.
[1] https://helpv2.orf.at/stories/1684683/index.html
[2] https://helpv2-orf-at.translate.goog/stories/1684683/index.h...
Are you really arguing that all operators introduced a yearly fee of exactly the same amount, and in a very short period of time, was somehow perfectly balanced out by a drop in monthly rates, and on average nobody ended up paying more?
Yes, Austria in general has a very healthy competitive market for mobile phone plans, but this particular move just looks extremely coordinated.
I'm arguing that after 2011 when the first operator introduced those fees, the cost of mobile phone plans decreased for many years until around 2019. It's also that not all operators introduced those fees and not all operators did at the same time. The main reason why many operators started charging with this fee structure is pretty obvious: it makes the monthly cost appear lower than it is. It's a form of sanctioned price in-transparency.
//EDIT: the main reason for the introduction of that Servicepauschale was that for a while internet service providers where required to participate in the now illegal "Vorratesdatenspeicherung". The pauschale was generally understood to cover the cost of the infrastructure for it.
Years later they couldn't find any direct evidence but providers were subsequently only not-guilty if they could show long term planning. With a duo- or tripoly it's not hard to have fix your prices together. This especially happens in the high-entry cost markets like telecom.
How was it not blatantly obvious that something is off if the exact same product from an Austrian manufacturer (not owned an international conglomerate) is consistently 20-30% cheaper in a grocery store in Berlin than it is in Vienna, minutes away from the factory where it's produced?
I'm honestly surprised that it took the recent inflation for people in Austria to get wise to the fact that they've been overpaying on groceries for at least a decade.
Especially in the western federal states bordering Germany I would have expected people to regularly go grocery shopping across the border (although supermarket prices aren't uniform within Germany; I have no anecdata about Bavaria, for example).
Re Austrian products cheaper abroad than in Austria - there was the curious case of a beer drink from Gösser, that was sold cheaper 700km away from the brewery in Berlin than in the town of the brewery itself: https://twitter.com/KernNiko/status/1692954540293947408/phot.... Gösser argued they wanted to promote the drink in Germany against local competition and that this was a temporary price drop.
Again, Germany made a smarter move by developing beer powder concentrate (https://www.wa.de/verbraucher/bierpulver-klosterbrauerei-neu... German). This allows them to remove the 90% water share of the beer when exporting it to Asia and still sell it as "brewed in Germany".
Well they could prove it (ie take the receipt with you), but got lame excuses for why is's cheaper in Germany.
The data does not clearly show that at all. It shows the expected result of inflation in a competitive market.
When Company A decides that it's time to raise prices on Product B due to inflation (maybe their wholesale price went up), Company C, being under the same market pressures to raise prices, also raises their price but, because they still want to be competitive, they don't raise them beyond Company A. Reacting to the market isn't collusion, anti-competitive or anti-consumer. If you just reverse the direction the prices are going, it seems a lot less sinister and it's still the exact same inputs/outputs.
The whole thread is made of points like that, especially the "asymmetrical information warfare" bit. He's scraping the websites for this data, right? Obviously that information is available at home. Moreover, the situation has actually dramatically improved because of the internet. You can now put together a cart on two different websites and go to the cheaper store if you'd like. Try doing that twenty years ago. I used to have to read the weekly ad to know these things, now I can just look online.
The _only_ point that's being made is that Austrian prices are a bit higher than other nations and, for some reason, he thinks it's because the companies are conspiring in some way and not that it's, for some reason, more expensive for those companies to operate in Austria. That seems like the obvious solution to me since they appear to have a competitive market with a few major players.