Germany: Stop Bullying Wal Mart
Germany's Cartel Office has decided that too much competition is bad. At a time when German corporations are buying companies all over the world, the government has decided to protect the domestic retail market. The Cartel Office accuses Wal-Mart and two local discounters, Aldi-Nord and Lidl, of selling below cost. The government says this will put small, family-owned shops out of business, leading to more concentration and higher prices for consumers. Ridiculous.
It's not consumers who are the big beneficiaries of the German regulators' myriad restrictions. It's inefficient businesses. The industry is awash in overcapacity. Germany has more retail floor space per inhabitant than France and more than twice as much as Britain. But shopping hours remain restricted, with stores forced to push out customers by 4 p.m. on Saturdays. Wal-Mart would like to keep its doors open to the public much longer than small retail shops.
Many German state governments have approved a proposal to loosen restrictions. But it would still prohibit shopping on all but four Sundays in the year. Judging from the long lines seen on Sundays at gasoline stations and railway shops, which are exempted from the rules, Germans want to shop in their free time like everyone else. Loosening up the rules would be a better way to boost the industry than slapping down one of the world's most efficient retailers, Wal-Mart.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.