Friday, 28 September 2012

Black markets in everything: Cheese edition

A determined government can induce black markets in anything. Canada's 300% tariffs on dairy imports, designed to protect Canada's dairy cartel, seems to have induced a new cross-border smuggling trade. Where booze flowed South from Canada during America's prohibition, now cheese makes its way north.

Here's World Report:

Contraband cheese.

And there are allegations that Canadian police officers were involved in the smuggling.

I want to see a CBC cutesy version of Boardwalk Empire based around this concept. Nucky Thompson and the Dairy Cartel. Or, maybe better, a Christopher Guest documentary.

HT: Chad Wellington


  1. I think you have mentioned cheese and butter Canada before Eric.Do you have an actual price of milk and cheese products in Canada. Why do governments invite their own people to black market. Do the dairy people have political power.And in what States. It seems strange to me that there would be a 300% tariff on dairy. I mean does Canadian know how to milk cow , or should we get across there fast and teach him.

  2. Hit the Dairy tag above, Peter. Then recall Olson on problems of collective action and Tullock on the Transitional Gains Trap.

  3. We may be nowhere near as bad as Canada, but I think we still have remnants of protectionism (a bit like the patches of snow that remain in hollows after the thaw). Many Chinese people (including our homestay student) have been sending tins of formula (mostly bought at a supermarket) to China, but it turns out that is illegal. You have to be some sort of registered exporter (at considerable cost, I think) to do this. The usual bullshit is being trotted out (babies must be safe everywhere, quality must be maintained, blah blah blah), but it looks a lot like protection for the incumbent exporters (i.e. Fonterra) to me.

  4. I couldn't find the dairy tag Eric, but I did some general research google they had cows advertising
    it was funny, and I realise that it would not be a good idea to smuggle methyl amphetamine to Quebec Canada inside quality American cheese

  5. yes, on to Olson collective action now, my Thai wife is worried about me, she says you can just look after me dear and not worry about the cow, and the cheese ,but thats what all the Thai girls say

  6. It's the "labels" tag at the bottom of the post, Peter.

  7. Illegal?! I know that the supermarkets restrict bulk purchases, but please point me to the export reg; I'd thought that Fonterra's export monopoly was removed more than a decade ago.

  8. Yes, it is illegal. See this:
    It is masked as a food safety issue I think, and not overtly as a protection of Fonterra's export dominance. There's a terrible irony in it, when you think about what happened with melamine in formula in China, and the part Fonterra played in that (namely the delay in informing the right people).