Posts Tagged ‘regulation’

A lesson from football: Labour needs to temper its regulatory reflex

13/06/2014, 11:04:06 AM

by David Butler

A few weeks ago, the first set of Financial Fair Play (FFP) fines landed upon the desks of the owners of Manchester City, Paris Saint-Germain and a host of other football clubs. UEFA’s new system is meant to make European football fairer, limiting the ability of clubs to generate losses in search of better league places in search of European glory/a group stage exit in the Champions League. Critics have accused the reform of strengthening the power of the big clubs. These critiques of FFP offer important insights for politicians looking to intervene in markets.

There is a convincing claim that FFP embeds oligopoly. Its structure strengthens clubs like Manchester United, Barcelona and Bayern Munich whose historic hegemonic position in their respective leagues means they are major profit-making bodies. Clubs who wish to compete with them need to make significant investments to be able to match the transfer kitty, wage offers, and footballing status offer by the big teams.  Relative insurgents like Manchester City or AS Monaco rely on owners who are able to invest a sum close to the GDP of a small African nation. These investments are overwhelming loss-making, at least initially, due to the huge cost of building a squad capable of challenging consistently for Champions League places. FFP means that fewer clubs will be able to pay the sunk costs often needed to enter the market for Champions League places within their respective nation. Bad regulation may well sustain the wealthy clubs and stymie greater competition.


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The Shergar burgers story tells us its time to look again at supermarket regulation

17/01/2013, 09:40:18 AM

by Peter Watt

This may end up being a bit of a rant so apologies.  Horsemeat, or rather horsemeat pretending to be beef in Tesco beef burgers; it was the rather shocking and grim story that we all awoke to earlier this week.  Much of the reaction surrounded the fact that the story related to the eating of horses – something we are culturally programmed not to do in our horse loving country.  I read several articles and countless tweets that explored the seeming contradiction inherent in our love of eating cows, pigs, chickens and sheep and so on – but not horses.  I also read a lot of jokes – my favourite being, “next time someone offers you a free burger, take it.  Never look a gift horse in the mouth.”

Now I don’t eat meat so I guess it’s easy to laugh, but then I saw this joke and it made me reflect:

“Those Aldi burgers were nice but I prefer my Lidl Pony”

It made me reflect because it suddenly clicked that the errant (mostly) beef burgers were part of the value range on offer by Tesco.  In other words they were from a range aimed at people on a budget.

I thought back a couple of weeks to a conversation I had had with a friend of mine who had hit a bit of bad luck recently.  As a result he and his family were seriously short of money and living on an incredibly tight budget.  He was telling me that they had bought some mince at a supermarket that was incredibly cheap and had used it to make a spaghetti Bolognese.  The meat was slightly odd looking raw and when cooked turned into a much reduced and gristly grey gloop.  It sounded pretty grim, but my friend had no choice but to buy this very cheap food if he was going to feed himself and his family.

But back to horsegate.  I started noticed that people were tweeting things like “this horse story is why I only ever make burgers from beef that I buy and mince myself.”  Or “it wouldn’t happen at Waitrose.” Now I have no idea whether it would happen at Waitrose but the point was that many people seemed pleased that they could pay to avoid eating that which they didn’t want to.  In this case horse.  Now I am certainly no class warrior (I suspect that this will not come as a shock to many!) but for me this pretty much misses the point of this story!  What are we saying here?  “It’s OK for poor people to eat crap as long as I don’t have to!”


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