EspañolIndustry cartels have a predicament when it comes to public relations. They exist to inflate prices and restrict supply, cream premiums for superfluous management, and enforce their monopoly status with the guns of government, but such parasitic motives aren’t about to win over supporters.
Instead, they have to make something up to justify their existence and legal protection. They fabricate a veneer of legitimacy, and hope that enough people will believe it to allow the gravy train to continue.
Quebec’s Federation of Maple Syrup Producers have been playing this game and expanding their domain for many years, going all the way back to 1966. They have managed to cozy up to those who control Canada’s most economically oppressed province and achieve a monopoly in production, distribution, and sales — “total control of the market,” in the words of a dissenting attorney.
They do tell a great tale, but cracks are starting to appear, and the truth is leaking out.
The official line is that the federation “was created to support the interests of 10,000 maple syrup producers across Quebec province,” who dominate the world market. That is peculiar, since some producers want nothing to do with them, and any incentive to serve vanishes when membership is mandatory.
The need for “fair prices” is the familiar refrain, but such an empty phrase should be an immediate red flag. It obscures market distortions that help neither the consumer nor the producer. In fact, rogue producers are defying the law and selling outside the province for lower prices.
That begs the question: why would anyone sell for less? Perhaps it is because the industry regime has assigned quotas and will not pay for production that exceeds stipulated quantities. We wouldn’t want consumers to enjoy more affordable maple syrup now, would we?
“Surpluses” must go into two burgeoning stockpiles in southeast Quebec, which now amount to tens of millions of pounds. But that just leaves producers waiting, and on officials who proved their recklessness when they allowed US$18 million worth of maple syrup to be stolen from them in 2012.
But there is more. Sweeping any union pleasantries aside, federation officials have become so aggressive and paranoid that they conduct stings with phony black-market deals to entrap members. They also take license to review member bank statements and utility bills.
The federation’s final attempt at rationalizing their numerous lawsuits against defiant producers is that everyone must pay for their all-essential research (PDF). If anyone who produces maple syrup owes these guys, whether they sought the research or not, why stop at just Quebec? What about all those in the United States and elsewhere in Canada?
Apparently the cartel’s tentacles struggle to reach beyond Quebec, and for the better. Their days of economic rent seeking ought to come to an end, as the actions of fed-up producers fly in the face of their cover story. Fortunately, that is happening by way of external competition.
Their efforts to inflate prices and hoard supplies have stimulated heightened production elsewhere, particularly south of the border. In recent years. Quebec’s share of the world market has fallen from 80 percent in the early 2000s to 71 percent now.
Competitive forces enact creative destruction on obsolete players, and the federation will inevitably receive the market’s justice.