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    Editorials
    Thursday, April 18, 2024

    Stop syrup cartel

    The following editorial is excerpted from the Bloomberg View.

    If you eat maple syrup (on your pancakes, in your coffee, straight from the jug in the middle of the night; there’s no wrong way), chances are it came from Quebec. Last year, the province generated almost 70 percent of the world’s supply.

    Quebec has noticed the bargaining power this creates. In 2004, the Federation of Quebec Maple Syrup Producers, a government-sanctioned cartel, began a quota system, regulating supply and preventing its members — or anybody in Quebec — from selling maple syrup to anyone other than the federation.

    It’s a bad idea.

    When producers collude to increase prices by limiting output, consumers almost always suffer. Quebec’s maple syrup cartel claims to be an exception. The federation says it merely stabilizes prices in an especially volatile industry. Maple trees require just the right temperatures, and even the slightest change can mean great swings in output, and hence price. Storing the surplus in good years and drawing it down in bad ones keeps a more orderly market, it argues.

    It’s true, as the federation emphasizes, that prices haven’t surged since the quota system took effect — but without it, higher production might have pushed prices lower. Frustration with the cartel’s rules has created a black market, with farmers and hobbyists selling directly to buyers in violation of the law.

    Quebec’s government is urging it to relax its restrictions. It would be better to let the cartel dissolve altogether, like clumps of maple candy in a cup of hot tea. 

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