[Letters] Is the government for anticompetitive policy?

The Fair Trade Commission recently fined Zespri, a New Zealand kiwi company, 427 million won ($375,000) for unfair trade practices. This penalty comes even as government policy increases the price of this fruit above market levels. (“Zespri penalized for unfair monopoly in kiwi sales,” Nov. 18, 2011).

Among the FTC’s charges: In an attempt to exclude other kiwi brands from store shelves, Zespri allegedly entered into exclusive retail agreements with local supermarkets. But supermarkets exist to make a profit and can do so only to the extent that they satisfy consumer demand. Charging that Zespri’s activities “unfairly restrain competition in the market,” the FTC claims to be concerned that such collusion will result in higher prices and lower quality for consumers. Yet, as your article notes, New Zealand kiwi are presently slapped with a 45 percent import tariff when they arrive on Korean shores, while Chilean kiwi face a 12.4 percent tax - artificial price hikes which are passed on to consumers. Is the FTC also planning to fine the Korean government for this anticompetitive policy?

Aaron McKenzie, a research fellow at the Center for Free Enterprise, Seoul