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by Dayo at 18:53 GMT - Thu 20 Sep 07

WHICH ONE IS THROWING THE ROCKS?

Fresh from tackling US monolith, Microsoft, is it time for EU Competition Commissioner, Neelie Kroes, to take on the Japanese Camera Manufacturers on their ridiculous pricing policy that essentially mean the rest of the world including EU residents effectively subsidise the US market. Neelie, the Old Battle Axe appears to be the only hope of rectifying this situation.

If Cola Cola was to go into the Teddy Bear manufacturing market and then use the profits from soft drinks to subsidise their Teddy Bears; this sort of thing is called Cross Subsidisation and would be considered illegal and anti competitive. Geographical Cross Subsidisation is specifically called dumping.

Actually, US regulators should take the camera makers to task for effectively dumping camera gear on the US market but since there is no domestic competition to lobby for this with fat donations to politicians (killing off domestic competition is one result of dumping), talk less of it probably being a vote loser (imagine the sound bites opposition candidates would have), Neelie the Old Battle Axe appears to be the only hope to rectify this situation.

It all boils down to just how much people around the world have to pay for the same products. How come photographic items can cost ?£1000 in the UK and $1000 in the USA when the US Dollar is less than half the value of the Pound Sterling? Yes, we know there are different costs of operation in different countries but with the US Dollar on a long term downward spiral initially triggered by the terrorist attack of 11 September 2001, accelerated by the invasion of Iraq and now sent into overdrive by the sub-prime mortgage fiasco, it beggars belief to assume that the cost of operation in the EU is more than twice that of the USA even when VAT is taken into account.

In any case, the prices for these products in countries with cheap labour that attracts these very same manufacturers to set up construction plants are still much higher than the US prices. Something doesn't stack up at all.

Are Nikon, Canon and the other camera manufacturers from the Land of the Rising Sun subsidising their US operations by overcharging people in other parts of the world to fill the void left by the plummeting US Dollar? The whole thing just does not add up otherwise and the EU is the only body with the muscle to do something about it.

Camera makers are not the only ones at this game as every manufacturer out there uses this tactic of subsidising the US market with sky high prices in other parts of the world. No one wants our poor cash strapped US friends to have to pay more for their goods just that each should pay their fair share. If the value of your currency plummets by over 30% then you should see a 30% increase in prices of imported goods and likewise if it gains 30%, there should be a proportional drop in prices. What is clear is that it should not be the other way round. I wonder why they just cannot try some pricing equity.


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