Why competition is not a dirty word.

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Why competition is not a dirty word.

By Conrad Reyners | 20 Mar, 2008

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The hardcore left seem to have an ideological revulsion to competition and its surrounding benefits. I take issue with this, and the reason why, is the fucking disaster that is the providing of food and bar services to our humble university populace. I genuinely implore our elected representatives to do something about this abhorrence — and spend a considerable amount of time campaigning for neo-liberal economic reforms of this universities vittles supply.

So whats the situation at the moment? Currently there are several places to get a snack during the day. Of these places, we can divide them into two groups.

Group One - Eurest.

Eurest, is a shortened form of European Restaurant brands, an international conglomerate of cafes, kitchens, restrurants and bars that supposedly provides excellent service internationally. KPR Catering, a massive local company owns the NZ franchise of Eurest, the sparse facilities here at Vic are a direct result of this commercial oligopoly. Eurest is factory food at its best, I would class its standards of service as lower than McDonald’s, and its business plans, management and attention to customer flow and satisfaction as severely distasteful. Who ever thought it would be a good idea, to have a crescent shaped aile for buying your food, right next to the main entrance (which was obviously only designed for a walk through capacity of about 25 students) is retarded. Its a traffic system worse than the Auckland motorway. Fix that shit. Soon.

The places that Eurest have a monopolisation over is, Mount Street Bar and Cafe, The Staff Club and No Meat Please — and they also get shitty when conferences try to bring their own catering in. Bastards.

Group Two - Sue Family

These group of renegades have a monopolisation over the other half of the student cafe battlefield. A family run business, it cant claim to have the backing of the corporate world. But it does have its sticky fingers in all the student’s pies. It runs Orb, Galleria and City Stop. I cant complain too much about their operations, they are obviously doing the best they can with the meagre facilities they have. Orb looks smaller than Harry Potters cupboard under the stairs — and seriously looks unsanitary. In saying that though, Galleria easily do the best coffee on campus. Too bad they are too bloody stingy to set up an eftpos machine. Seriously, there is no economic rationale for that, the increased traffic would easily cover the transaction charges. Galleria is economically shooting itself in the foot. Hooray.

Why are these two groups bad?

1. Prices can increase, because there is no need to undercut competitors

2. There is no variety in food, because the Students cant be fucked going anywhere else

3. The food is bad, because again, where are the Student’s going to get anything better?

4. There is no need to prioritise customer service, because, once again students are held by the balls

So whats the answer? How do we break these two behemoth duopolies. The answer is somehow removing the control the Union has over the tendering of food outlets around campus, and instead opening those areas up to the Market. There are various proprietors around Wellington who would jump at the chance to open up fresh businesses around campus.

Wellington is NZ’s coffee and cafe capital, Vic Uni has regularly 15,000 - 20,000 people on campus. Why we have to suffer such abhorrent and disgusting facilities is beyond me. Something needs to be done.

I call on VUWSA and the University to break up the Iron and Odious grip that the Union and the Sue Family has on our food and drinks provision. Open it up to private tendering by both professional catering firms AND small business proprietors. Make sure you have at least four different companies operating on campus. Ensure they cant collude. Something needs to change — and true market competition is the only way it will.

Comments

Kerry
March 21st, 2008 at 8:20 am

Anytime an “s” appears, one of the following rules has been broken:

-There is a missing “is”, ie: present tense, the verb “to be”
-There is a missing apostrophe, denoting possession
-It is a plural, thus does not need apostrophisation, unless the subject is a collective noun expressed in the plural form, ending in an “s”
(one of those famous “exceptions to the rule” that ESOL students love to hate)

I’m so subbing your blog posts, Conrad, in future!!!
I can’t believe I was feeling so sick last night that I skim-read that & didn’t jump on it straight away.

BTW, those three things are the most common grammatical errors I’ve been subbing out of the writings of the NCEA generation, which is why I’m posting the rules.
Obviously, whilst getting all the paperwork done for reporting progress, teachers aren’t getting to teach much English these days….

Conrad Reyners
March 21st, 2008 at 1:36 pm

To do you seriously have nothing better to do? Its a blog post….

Jackson Wood
March 21st, 2008 at 2:36 pm

I find it amusing that Vickies and the Staff Club, both operated by Eurest, have advertising around the things on the tables that you put your number in, telling you to eat healthy, and get more grains. This is especially ironic because most of their sandwiches are white bread, and I pretty sure they do not offer a whole meal bun option for their burgers.

Choice is indeed a good thing. Especially when I have to pay at least $3.50 for a two peices of white bread, sandwich slice, lettuce, processed cheese, and some mashed up egg.

The university should renegotiate the current leases, boot them out, and offer reduced rents to other companies, cafe owners, from around Wellington, under the priviso that food is a reasonable price.

Of course, because the University is an isolated market, we run the risk that no matter who the greedy capitalists are, they will use their position on campus to extort money and work together to keep prices artificially high, and keep screwing over students.

Conrad Reyners
March 21st, 2008 at 4:53 pm

Agreed Jackson, and thats an ongoing concern. However, through a ‘good’ and diverse selection of outlet lease holders, we can eliminate that as much as possible.

It is always in the interests of business men and woman, both with large and small companies, to try and gain market share. Even if that Market share is only the University populace. Therefore, its more likely than not that they wont collude together.

I must applaud you for actually engaging on the topic of the post however, and not just nit picking at small grammatical errors. It’s nice to know people can appreciate things holistically these days, and aren’t just contributing to engage in political point scoring.

Jackson Wood
March 21st, 2008 at 4:57 pm

I only do that because I, just like you, am useless at speeling

Jonny
March 21st, 2008 at 7:25 pm

..and at editing. Universities is plural - University’s is singular. You missed that one Kerry.

Brunswick
March 21st, 2008 at 8:03 pm

I think blog posts should remain unsubbed, because it captures the wild, spontaneous, carefree, pants-off-teabagging-the-political-editor circumstances in which they were written. Each typo is a badge of honour, each missing apostrophe a Victoria Cross.

Conrad Reyners
March 21st, 2008 at 8:22 pm

Each attack by an over-zealous sub editor, a purple heart.

Jackson Wood
March 22nd, 2008 at 12:04 am

Each retort by a politics writer, a Royal New Zealand Naval Volunteer Reserve Long Service and Good Conduct Medal.

Jonny
March 22nd, 2008 at 2:30 am

hey are these blogs post comments just chats between conread and jackson.. if so, why cant you do it face to face in the office…justwondering…. take both your comments out and there wouldnt be much left…

Conrad Reyners
March 22nd, 2008 at 1:22 pm

Who is Conread?

Is that my ultra nerdy super librarian triplet?

Jonny
March 22nd, 2008 at 5:41 pm

Conread is conread with a capital letter.

Kerry
March 22nd, 2008 at 6:28 pm

responding to Conrad, yesterday afternoon - yes, I do have better things to do, and have been doing them.

Hey, I studied to be a language teacher.
Just be grateful I’m not subbing your grammar in French!

Et pour vous, les autres - ils sont tous les deux des grands salopes, et je n’ai aucun temps à perdre encore pour ces misères. Salut!

Laura McQuillan
March 22nd, 2008 at 9:10 pm

Yeah Conread, be grateful bitch

Conrad Reyners
March 23rd, 2008 at 3:07 am

Yea. Too bad I don’t write in French. Then I’d be totally fucked. Merde.

Jackson Wood
March 24th, 2008 at 2:57 pm

Vous marque mes yeux faites mal et mon réservoir souple détruisent.

Conrad Reyners
March 24th, 2008 at 4:53 pm

Pourquoi dont vous foutez le camp Jackson ?

Brunswick
March 24th, 2008 at 7:37 pm

Kerry! They’re doing it again!
Bang their heads together in French - le Conk!

Conrad Reyners
March 25th, 2008 at 2:17 am

I have now made it a personal crusade to be completely petulant when it comes to helping sub editors.

Merde, Merde, Putain Putain.

Jimmy
March 25th, 2008 at 1:09 pm

IIRC the Union (not the VUWSA) are responsible for Eurest. Back in my day we looked at trying to improve / rid etc but found that VUWSA didn’t have much of a say in the whole process.

Oh and that process is where the free-market capitalist competition you want so dearly happens - companies bid for the contract against each other.

Oh and Jackson - $3.50 for a sandwich is cheap - even for a shitty sandwich.

BTW - i’m just checking this site out to see how much haterising Jackson’s getting.

Conrad Reyners
March 25th, 2008 at 1:24 pm

Yea, the Union are responsible — I never said they weren’t, furthermore my proposed solution outlines specific guidelines for the tendering of contracts, so that current system doesn’t re-emerge.

Stephen Whittington
March 26th, 2008 at 4:41 pm

I find it weird that you describe it as a monopoly situation, when there are clearly two groups. Most literature on competition law suggests that to have market power, you need to have captured a much higher proportion of the market to have market power.

Also, the competition occurs at the point of tendering. The highest bidder will be the winner, and that gives them the incentive to maximise profit. Maximisation of profit is the means by which companies extend good service. The fact that the food is shit at these places suggests that students are poor, or have bad taste.

Having said that, I find the food at most cafes in Wellington pretty shit.

Stephen Whittington
March 26th, 2008 at 4:43 pm

Well, it’s obviously not the means by which they do it - it’s the incentive of profit maximisation that forces them to respond to consumer demand.

Cado
March 26th, 2008 at 4:53 pm

‘Also, the competition occurs at the point of tendering. The highest bidder will be the winner, and that gives them the incentive to maximise profit. Maximisation of profit is the means by which companies extend good service. The fact that the food is shit at these places suggests that students are poor, or have bad taste. ‘

So you are arguing in favour of high barriers to entry then?

Cado
March 26th, 2008 at 5:02 pm

I think your point is misconceived. The suppliers obviously factor the cost of tendering into their prices anyway and pass on that incidence to the consumer.

Stephen Whittington
March 26th, 2008 at 5:22 pm

Do they? Why don’t they just pass on higher profit margins by charging more?

Price is not determined by cost. Price is determined by supply and demand.

Karl Marx
March 26th, 2008 at 6:37 pm

” find it weird that you describe it as a monopoly situation, when there are clearly two groups. Most literature on competition law suggests that to have market power, you need to have captured a much higher proportion of the market to have market power. ” - Stephen

Most literature on competition law is shit. However, even taking your point into consideration there is still an obvious duopoly here, holding the workers sustenance at the point of the capatalist sword

Jimmy
March 27th, 2008 at 8:59 am

Except you’re students, not workers ;-) Also, though price generally isn’t determined by cost, in the hospitality industry it often is. As part of general industry training I believe it is still standard to calculate what to charge for something by ensuring that the food cost is approximately 27%.

Cado
March 27th, 2008 at 12:48 pm

‘Price is not determined by cost. Price is determined by supply and demand.’

Yes, and cost is a determining factor in the amount a firm will supply. Duh.

‘Also, the competition occurs at the point of tendering.’

Exactly what are you arguing for? The right for large bureaucracies such as the Union to hand out tender contracts? This is more important than student consumers’ access to good food and/or market efficiency for you?

‘The fact that the food is shit at these places suggests that students are poor, or have bad taste.’

No it doesn’t. It suggests that there are limited options for students to choose from. If the tender process was revised, other shops could set up, and the places that serve shitty food or overcharge would be forced from the market.

‘Having said that, I find the food at most cafes in Wellington pretty shit.’

Cool. Thanks.

Stephen Whittington
March 27th, 2008 at 2:37 pm

If you think that in the absence of a tendering process, a decent food alternative would appear around university and succeed, my question is this: why is this fictional firm not bidding for, and winning, the tender?

Or put another way: why, if Eurest is so shit and no one likes it at all, are they able to derive the greatest value from the tender, compared to all other potential market players?

Cado
March 27th, 2008 at 2:45 pm

How about you answer some of my questions before I answer some of yours?

Plato
March 27th, 2008 at 3:34 pm

Speaking of Eurest I happened to go to the City Council meeting this morning (in regards to the proposal to ban drinking in public places 24/7) and afterwards I went into the foyer with all the city councilors and had a cup of coffee (my rent went up recently, which would be because of those rates increases! So I got some of my money back) anyway they had catering there provided by none other than Eurest and it wasn’t shit. I was indulging in my civic duties as a citizen and enjoyed some scones and fancy pastries…

Tristan Egarr
March 27th, 2008 at 4:54 pm

My guess would be that Eurest and the Sues win the tender because they can pay alot because they charge alot; and because even though they charge too much there are no alternatives. Of course this demonstrates the law of supply and demand in action, but only because the supply side is overly restricted…

Personally I don’t mind the Sues tooo much because Unistop sandwiches are alright and Galleria coffee is alright… however it has to be said that the Krishnas kick everyone else out of the water, and I tend to buy supplies for the Salient office from Meenas.

What this demonstrates is that, given the opportunity to set up shop, a wider range of companies operating on-campus could provide better alternatives. This is the problem with the supply side of the current equation. Demand? We need food and don’t want to walk up and down hills, so the only way to ensure we get cheap food (and we are greedy indeed) is to make sure we have a competitive supply. Booking in a more diverse range of club fundraisers might be an interesting start…

Cado
March 28th, 2008 at 11:53 am

basically what you’re saying Tristan is that the current market structure is in economic terms similar to an ‘oligopoly’. This means that firms can exert some pricing and quality determination through exerting market power.

Another good way to change this is to lobby the Union to take student responses into account when determining the tender process. Why should student food requirements be determined by who pays the most upfront, rather than who provides the most competitive service for students?

Tristan Egarr
March 28th, 2008 at 12:52 pm

Exactly. A university run for students may be a naff idea, but it would be kinda neat…

Conrad Reyners
March 28th, 2008 at 6:39 pm

Did anyone even read what I posted? I advocated for our student reps to lobby the Union. What good will come from it I don’t know, but it would make more sense (and political capital) then advocating for a completely untenable cause, like free internet and printing.

Hint Hint..

Le Morse
April 3rd, 2008 at 3:41 am

So what was the mission statement for this post? Get a dull reactionary to uncritically beat up a big fuck-off strawman?

karl bronstein
April 3rd, 2008 at 6:20 am

Oh Le Morse you beautiful bastard, jolly good.

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Conrad Reyners

Conrad is a very grumpy boy. When he was little he had a curl in the middle of his forehead. When he was good, he was moderately good, but when he was mean he was HORRID. He likes guns, bombs and shooting doves. He can often be found reading books about Mussolini and tank warfare. His greatest dream is to invent an eighteen foot high mechanical spider, which has an antimatter lazer attached to its back.