Thursday, 18 March 2021

The pointy end

Almost seven years ago,  the Productivity Commission raised it as an issue worth looking at. MBIE put out an issues paper in 2015; submissions rolled in in early 2016; the government kicked for touch in 2017; MBIE put out another discussion paper in 2019; a policy paper went to Cabinet in February 2020; and at long last a Bill was introduced this month. The Commerce Amendment Bill 2021 is now with the Economic Development, Science and Innovation Select Committee, which is due to report back by September 16. 

In sum, we've finally got to the pointy end of doing something about s36, the bit of our Commerce Act that is supposed to rein in powerful incumbents from abusing their market power, but doesn't. The Bill provides for changing our s36 wording from the current unsatisfactory

"A person that has a substantial degree of power in a market must not take advantage of that power for the purpose of — (a) restricting the entry of a person into that or any other market; or (b) preventing or deterring a person from engaging in competitive conduct in that or any other market; or (c) eliminating a person from that or any other market"

to

"A person that has a substantial degree of power in a market must not engage in conduct that has the purpose, or has or is likely to have the effect, of substantially lessening competition in — (a) that market; or (b) any other market".

It gets us out from under all the problems "taking advantage of" has caused in our competition jurisprudence, and for good measure lines us up with the Aussies, who made the same change to their equivalent legislation back in late 2017.

Submissions to the Select Committee are due by April 30, so it's time to start putting your thoughts together. If you want to keep track of how the Bill is going, you can sign up to get e-mail alerts from the Select Committee here and you can follow progress at the Bill website.

I will be submitting in wholehearted support of the change to s36 for the reasons I mentioned last year when the policy paper went to Cabinet ('It creeps ever closer'), and I hope others will, too. But I'll be opposing one element of the Bill. Last year I didn't like the look of a proposed amendment, giving the Commerce Commission powers to share information it holds with other public agencies: I thought that "there should be a tough threshold test before any of that information gets passed around the wider public sector agencies", and indeed the Cabinet paper had talked about "appropriate safeguards".

In fact the proposed level of safeguarding is pitiful. The Bill at s99AA(1)(b) provides that the Commission can hand information over when it considers it "may assist the public service agency, statutory entity, or Reserve Bank in the performance or exercise of its functions, powers, or duties under this Act or any other legislation".

"Hey, guys, you might find this handy" is no safeguard at all.

Thursday, 11 March 2021

What's next?

The OECD came out this week with an update to its economic outlook and a set of policy recommendations. If you've wondered how New Zealand has been faring through the Covid outbreak, relative to my selection of the usual suspects, here's how we went in 2020 (we're red, and there are a couple of comparators in green, the OECD, and the world as a whole) ...


and here's how the OECD sees 2021 going ...


... and here's their best guess at 2022.


We scrub up pretty well when you look back at 2020: we had a typical-sized downturn (a tad worse than the world as a whole, a tad better than the typical higher-income OECD country), but for a much better Covid outcome than in most places, so as a package it's pretty impressive. Longer run, it looks, unfortunately, like back to the pre-Covid status quo: the OECD says we should expect relatively slow growth by either world standards or by comparison with our better-off peers.

On policy, beyond the obvious big macro settings (" A premature tightening of fiscal policy must be avoided.  The current very accommodative monetary policy stance should be maintained"), the OECD's recommendations are
  • "vaccinate fast" (Co-ordinate and accelerate vaccination of adults across the world, ensure poor countries receive their fair share of doses, and improve funding for the COVAX initiative, ensure effective test, track and trace programmes)
  • "invest fast" (Speed up implementation of new spending plans...to boost growth and jobs, help businesses adapt to a digital future, privilege grants and equity-type support over debt to give viable small and medium-sized companies the space to develop, invest in cleaner infrastructure and digital technology to foster a transition to a more resilient and sustainable economy) and
  • "support people" (Protect the incomes of people hit hardest by the crisis, help the low skilled and the vulnerable, improve training schemes and access to the labour market, focus on youth – young people need particular support now and to help them prepare for a changing world of work)

and who's going to argue with any of that, though you have to feel that "invest" and "fast" do not come easy to New Zealand policymakers, and I'll be pleasantly surprised if it happens. It would be nice if, for once, we just took the OECD's ideas and ran with them quickly and comprehensively: unfortunately, our track record is not crash hot ('Are we serious?', 'Take advice? Moi?').  Among other things, we wouldn't have today's housing market problems if we'd listened to the OECD's suggestions, going back to 2017, on how to address them. 

Wednesday, 3 March 2021

What if they threw a party ...

... and nobody came?

Which, in the competition space, is where we've got to, with our attempt to make it easier for companies to collaborate to deal with problems like Covid disruption to supply chains. We set things up to make it easier and faster for the Commerce Commission to authorise collaboration - but nobody's used the new dispensation.

Here's the background. The COVID-19 Response (Further Management Measures) Legislation Act 2020 went live mid May of last year. Its heart was in the right place. During an 'epidemic period', a new s65AD of the Commerce Act allows the Commission to issue a provisional authorisation. ss65AD(2) and (3) are the key bits:

(2) The Commission may make a determination in writing granting a provisional authorisation ... if the Commission considers it is appropriate to do so—

(a) for the purpose of enabling due consideration to be given to the application; or

(b) for any other reason.

(3) The Commission is not required to comply with section 61(5) to (6A) before granting a provisional authorisation

(3) means that the Commission doesn't have to hang about and be "satisfied" - the test in normal times, under s61(6) - that the collaboration would provide "a benefit to the public which would outweigh the lessening in competition that would result". It can just say, get on with it for now and we'll do a fuller analysis later. Right on.

As fellow aficionados of New Zealand's mania for micromanagement will appreciate, you don't see the wide discretion of "for any other reason" written into the Kiwi statute books too often. In fact it's a straight crib from the Aussie equivalent (for wonks, s91(2)c of their Competition and Consumer Act). The ACCC has been able to do "interim" authorisations all along, Covid or no Covid, and you'd think that's a sensible plan.

Oddly, our own Commission used to have the power to issue provisional authorisations under the then s63 of the Commerce Act, but that got repealed by s22 of the Commerce Amendment Act 1990. Go figure.

Never mind, here we are today, back to the original status quo, even if it only applies in epidemic periods. Given that in normal times getting an authorisation strongly resembles wading through hip-high tar for months carrying a complete bound set of Econometrica, something cheap, cheerful and, above all, fast, was just what was needed to enable urgent collaboration in the public interest.

But nobody's used the new process. There have been no applications for authorisation under the new provisions.

Which is odd, because over in Oz, the ACCC has been issuing interim authorisations all over the place: public and private hospitals, medical wholesalers, grocery retailers, banks, regional airlines, and fuel importers and distributors. It's been commendably quick - overnight, on one occasion - in turning the applications around, and it's been putting pro-competitive safeguards such as time limits into them without nobbling the public welfare point of it all. 

What sort of stuff is being authorised? For the supermarkets, as an example, it was things like jointly addressing panic buying: "co-ordinating store hours, including allocating dedicated shopping hours for  elderly and disadvantaged members of the public during periods of high demand for Retail Products", "implementing uniform or similar purchase limits and related public messaging", and "measures to ensure continuity of supply to consumers in remote or regional areas, including securing special allocations of stock and joint requests to suppliers", as you can read in this draft determination.

Sure, Australia and New Zealand each have their own funny little ways, and there's no reason why we should do everything the same way. But I'm still bemused why helpful interim authorisations are flying off the ACCC shelves, while nobody's come into the Commerce Commission looking for one. Anyone got ideas?

Wednesday, 24 February 2021

An OCR cut isn't dead after all

Every economist polled before today's Monetary Policy Statement (eg here and here) said there'd be no change to the Official Cash Rate (OCR). Quite a few (including me) thought it's unlikely that any further cuts are on the table (and that the option of going to a negative OCR might even be taken off the table by the Reserve Bank); that the next move will be up (likely preceded by winding back some of the unconventional monetary policy tools); but that it's still necessarily a longish way away. Personally I was also wondering what weight the Bank would place on the December higher than expected inflation rate and the very much lower than expected unemployment rate.

The OCR did indeed stay at 0.25%. Taking it to zero or into negative territory has not, however, taken off the table: quite the contrary. The Statement said (p3) that it's now operationally do-able ("the operational work to enable the OCR to be taken negative if required is now completed") and the minutes of the latest policy meeting said (p6) that "The Committee agreed that it was prepared to lower the OCR to provide additional stimulus if required". There was even a section on pp26-7 headed "A zero or negative OCR would provide additional monetary stimulus, if required" and went into how it might work out in practice.

Adrian Orr was asked at the media conference about the pre-MPS expectation that a lower OCR might be sidelined: he said the bank prefers to maintain a full suite of options against whatever might befall down the track. Fair enough: personally I was starting to wonder whether a lower OCR catalyst might be the need to defuse any unwanted appreciation in the Kiwi dollar. 

The Bank is rightly being cautious on reading too much into the December numbers: "How long the recent recovery in inflation and employment can be sustained is highly uncertain ... Our baseline scenario for the economy, while starting from a stronger position than assumed in November, is subdued. Significant monetary stimulus remains necessary to confidently and sustainably meet our inflation and employment objectives" (p7). 

So there will be "a prolonged period of time to pass before these [inflation and employment] conditions are met" (p6) and "Meeting these requirements will necessitate considerable time and patience" (p3). How long? The Bank publishes a measure called the "unconstrained OCR"* which has a go at measuring the overall degree of stimulus: its latest one (p41, reproduced below) shows the existing level of stimulus increasing just a tad during the rest of this year, but gradually becoming less stimulatory (though still strongly supportive) through 2022 and into 2023. When will monetary policy be back at "neutral"? If (as Figure 6.4 on p50 suggests), a "neutral" OCR is something like 2%, chances are that we won't see one till 2024 or beyond.

There's usually some interesting one-off stuff in each Statement. There's a box (pp19-21) on current conditions in the Māori economy, and this new visualisation (p14) of conditions in the labour market, which does a nice job of bringing together the various ways you might look at the market to figure out how close you are to maximum sustainable employment. 


*In the May 2020 Statement, p11, it had said that "the Reserve Bank used a projection of the OCR to highlight the level of monetary stimulus needed to achieve our inflation and employment objectives. A fall in the OCR projection relative to the previous Statement meant that more policy stimulus was needed. We have had to modify this practice given the Monetary Policy Committee’s forward guidance on the OCR out to early next year and the use of alternative monetary policy instruments. We have opted to publish an unconstrained OCR ... This demonstrates the broad level stimulus needed to achieve the Reserve Bank’s monetary policy objectives, much like the OCR projection demonstrated in the past"

Saturday, 20 February 2021

You probably got ripped off, too

I'm involved with a training programme for an overseas competition agency, and we've been going through the law and economics of cartels: I've been talking about the detriments they cause. As it happens, there's a recent spectacular example of how bad they can be.

One of the gurus of cartel documentation has been John Connor, emeritus professor at Purdue and a senior fellow of the American Antitrust Institute. In 'Twilight of Prosecutions of the Global Auto-Parts Cartels', he's written about one of the biggest cartels ever (amounts cited are US dollars):

At last count 18 jurisdictions vigorously prosecuted this supercartel, which demonstrated exceptional duration, global reach, size, and injuriousness. Estimates for affected commerce of the Auto-Parts supercartel range from $3.2 to $5.0 trillion. There are few reliable estimates of overcharges, but averaging the few preliminary estimates suggests that injuries are in the range of $0.6 to $1 trillion (p1)

That's a pretty impressive level of overcharges, exacted from 17 different car manufacturers from around the turn of the millennium though to late 2009, when the cartels started to get rumbled. Chances are, if you bought a car in the 2000s, you're one of the vast number of victims yourself. Depending on what criterion you use, this was either the largest or second largest grouping of related cartels ever found.

Connor reproduced this picture, originally from a European Union enforcement announcement, showing just how many different components of a car got targeted by the cartels. Basically everything but the engine, the transmission and the bodywork got rorted. If the 'wire harnesses' rings a bell, that's one where the ACCC got involved: the Japanese company pinged in that case unwisely decided to appeal their fine, with appropriately karmic results.


There's a great deal of stuff to take away from this example, one being that companies can be too hard-nosed at bargaining for their own good: "Did the assemblers [the carmakers] push too hard on price reductions in the early 2000s, and thereby trigger supplier collusion to cope with an existential threat?" (p1). It's not a defence, and it doesn't even take us very far into tout comprendre c'est tout pardonner territory, and you shouldn't blame the victims, but (like the Lodge case here at home) you do wonder whether the damn thing would ever have happened in a more reasonable world.

And if you're into corporate strategy, you might want to think twice about all that financial engineering cleverness. You can't be rorted if you've vertically integrated that component. Divest it, though  - free up capital and all that good stuff - and you've opened up some vulnerabilities:

Perhaps it is no coincidence that collusion against GM began soon after it sold its Delco-Remy division in 1994, against Toyota after DENSO no longer supplied a majority of output to Toyota, etc. Any financial cost savings resulting from divestment may have backfired. Second, by delegating manufacturing of minor inputs (say, 2% or 3% of total material inputs) to ostensibly unaffiliated suppliers, the OEMs ['original equipment manufacturers', i.e. the carmakers] suffer a substantial loss of information about manufacturing costs and a consequent loss of bargaining power over price (p16)

The main takeaway from the cartel, though, is the ineffectiveness of the fines. We know the theory: if there's a 100% chance of being detected, a fine equal to 100% (or more) of the overcharging will deter; if there's a 20% probability, then a fine of 500% (or more). What actually happened here?

There are few reliable estimates of the size of overcharges for these cartels, and more are desperately needed, but averaging the few preliminary estimates suggests that injuries are in the range of $0.6 to $1 trillion. Even if monetary penalties rise to double the current $20 billion, cartel deterrence or cartel dissuasion is highly unlikely (p30)

Which does get you thinking about the alternative sanction of criminalisation - sending executives to jail - which we are about to introduce from April. In egregious cases like car parts, you can see why people would well reach for it. But as someone from the socially liberal end of town, I have two reservations.

Here's the first one (data from this Statista page, and originally compiled here). We're already well down the wrong end of this international comparison: we're just about the last country in the world that ought to be thinking about putting even more people in jail. 


And here's the other:

Unlike typical international cartel prosecutions in the past, few of the individuals held accountable by antitrust authorities in Auto Parts have been CEOs, COOs, or CFOs of their parent companies or even their subsidiaries ... Rather, they have held titles like sales manager, director, marketing manager, or department head of units below the corporate VP level (p27).

When we eventually press the criminalisation button, I hope we don't make the car parts mistake - jailing some midlevel functionaries, but letting the big fish swim free.

Monday, 1 February 2021

Good books 2021

Over the summer holidays we like to blob out and read, and I've caught up with some great titles.

In economics, top of the list are two excellent books, Zachary D Carter's The Price of Peace: Money, Democracy, and the Life of John Maynard Keynes; and Matt Ridley's How Innovation Works. I've also enjoyed Daniel Markovits' The Meritocracy Trap (and in the same area I've got Michael Sandel's The Tyranny of Merit: What's become of the common good? lined up); and next on the runway will be Robert Skidelsky's What's Wrong with Economics? A primer for the perplexed. Tim Harford's How to Make the World Add Up: Ten Rules for Thinking Differently About Numbers focuses on the behavioural biases we bring to statistics, and is likely to prompt you to have a go, if you haven't yet, at Daniel Kahneman's fascinating Thinking Fast and Slow.

In biography, I hugely enjoyed Fredrik Logevall's JFK: Volume 1, 1917-1956, where the story reaches JFK's (in retrospect fortunate) failure to get the Democratic vice-presidential nomination in 1956 and his decision to go for the big one in 1960. Volker Ulrich's second volume, Hitler: Downfall, 1939-1945, necessarily has more military history than the politics and personalities of the previous Hitler: Ascent 1889-1939, but is also a good read. We've been blessed with some great biographies in recent years: try Ron Chernow's Grant (Ulysses S, that is), or Charles Moore's three-decker biography of Margaret Thatcher.

In politics, I defy anyone not to enjoy Sasha Swire's ringside view of the Cameron years, Diary of an MP's Wife. Still in the UK, both Gabriel Pogrund and Patrick Maguire's Left Out: The Inside Story of Labour Under Corbyn, and Tom Bower's Boris Johnson: The Gambler, are well worth reading. Anne Applebaum's Twilight of Democracy: The Failure of Politics and the Parting of Friends will get you thinking about the origins of polarisation, populism and demagoguery, and dovetails nicely with Ian Dunt's How To be a Liberal.

And in history I'm well into Ritchie Robertson's enormous The Enlightenment: The Pursuit of Happiness 1680-1790, and when that's finished I'll be starting Katja Hoyer's Blood and Iron: The Rise and Fall of the German Empire 1871-1918. If you've any nostalgia for hereditary rule, Martin Rady's The Habsburgs: The rise and fall of a world power will put you right. While you're wandering around central Europe, try Richard Fidler's The Golden Maze: A biography of Prague

After all that highbrow fare, I confess my fiction tastes run to private eyes and the more intelligent espionage thrillers. This summer's haul included the third in Glen Erik Hamilton's Seattle-based Van Shaw series, Every Day Above Ground, Peter Hanington's A Single Source (an oldstyle BBC Radio journalist gets caught up in illicit arms smuggling during the Arab Spring), Henning Maskell's After the Fire (he's best known for his Inspector Wallender books, this is a one-off), and Liz Moore's A Long Bright River (Philadelphia policewoman on trail of someone killing young women,and her drug addict sister is one potential target). I'm halfway through Cecilia Ekbäck's very well written The Historians, set in the murky politics of WW2 Sweden.

I'm a big fan of the physical book. I like the heft, the shape, the smell of a new book. Our house is stacked with them. So I've had to be dragged kicking and screaming to the idea of a Kindle. But now that I'm there, I have to say, it's terrific. See a good review, and you can have the book on your Kindle a few minutes later. It's great on a plane or anywhere else bulk comes into consideration. While I'll never begrudge the price of a good book, and I'm still reading both physical and digital versions, the Kindle price for the e-version is quite handy, too.  And if your partner's sleeping habits aren't synchronised with yours (ours aren't), with a backlit Kindle you can keep reading in bed when the lights are off.

Monday, 21 December 2020

Where is fiscal policy going?

Last week's Half Year Economic and Fiscal Update, the HYEFU, got the usual coverage: the headline deficit, the debt profile, Treasury's latest economic outlook. All fine and well, and important issues in their own right, but equally as usual the coverage came and went with little or no mention of whether fiscal policy is boosting or braking the economy or by how much. 

That's pretty important in its own right too - people want to know whether a government is using fiscal policy to help in bad times, and especially through really rough times like the GFC, the Canterbury earthquakes and now Covid - but for some reason it never gets the air time it deserves. It's not helped by the jargon around measuring the stance of fiscal policy which only Treasury analysts and (cough) fiscal geeks could love.

So in my regular attempt to fill in the gap, here is the winner, by a wide margin, of the Most Important But Most Neglected Graph in a Treasury Publication award, from p8 of the HYEFU.

Stepping through this, the black line is the government's fiscal balance after you take out the effects of the state of the economy (that's the 'cyclically adjusted' reference) and after you take out things like interest payments which don't affect whether the government is boosting or braking economic activity (that's the 'primary' reference). What you're left with in principle is discretionary changes in fiscal policy settings.

Treasury says that "The continuation of supportive fiscal policy across the forecast period is shown by the large cyclically-adjusted primary balance deficit" (let's call it the CAPB). And that's true: anytime the government is adding to aggregate demand (with its expenditure) more than it is removing it (through taxes), it is being supportive. 

But there's more supportive and less supportive, and that's shown by the blue bars, which show the 'fiscal impulse', which is just the difference between one year's CAPB and the previous year's. As an example, in the year to June 2019, government policy was mildly a brake, to the tune of a CAPB surplus of 0.5% of GDP. In the 2020 June year, it had become a strong boost, with a CAPB deficit of 4.3% of GDP. That makes for a 4.8% of GDP 'fiscal impulse' turnaround from one year to the next. In the June 2021 year policy becomes more expansionary again (the CAPB deficit gets bigger / there's a positive fiscal impulse, same diff). All as it should have been through Covid, and many other governments did much the same (here's my comparison of our stance and Australia's).

Things are forecast to get trickier in the June 2022 year and beyond. Fiscal policy remains supportive throughout: there are ongoing CAPB deficits, but they get smaller as (for example) emergency Covid schemes are wound down. Fiscal policy is still expansionary, but progressively less so.. An analogy would be the Reserve Bank raising interest rates, but still leaving them at pretty low levels.

How quickly to cut back support, and by how much, is one tough policy call to make for government and its Treasury advisers. Here is what the fiscal policy outlook looked like in the past three Economic and Fiscal Updates.

It's shifted around quite a lot. Treasury says (p8 again) that "the fiscal impulse is lower in 2020/21, but less negative in 2021/22 and 2022/23. This is predominantly driven by some COVID-19-related expenditure previously expected in 2020/21 now taking place in later years across the forecast period". The latest profile also reflects, I'd guess, the Covid hit being not quite as bad as first feared, and the initial bounceback bigger and earlier than expected. 

Overall, the forecast fiscal stance looks pretty reasonable: there's still a hole in the economy where the international tourism and education sectors were, so ongoing fiscal support makes sense while that hole needs filling in, but winding it back also makes sense as the rest of the economy recovers. And if we're fully back to normal (2023 onwards?) you (a) don't want to risk being procyclical with needlessly supportive fiscal policy in good times and (b) it'll be time to start thinking more about debt sustainability.

The lag in planned expenditure that Treasury mentioned doesn't wholly surprise me. It's true that fiscal policy through Covid showed that it can be remarkably agile when it wants to be: apply for a wage subsidy on a Monday and have it in your bank account on a Tuesday was a remarkably fast policy decision and rollout. It gives the lie to older thinking that fiscal policy would always be too slow to matter, and the big countercyclical lever would have to be monetary policy (ignoring the fact that monetary policy itself has long and variable lags). All that said, I suspect that there was also a chunk of projects that proved to be shovel unready, as it were, and it's a further little glimpse of the planning, policy, and implementation sluggishness that's left us with our perpetual infrastructure deficit.

Friday, 27 November 2020

It can work after all

At our usual blistering pace - the Fair Trading Amendment Bill was introduced in Parliament 11 months ago, and is still with its Select Committee (Economic Development, Science and Innovation) - we are getting closer to prohibiting 'unconscionable conduct'. 

'Unconscionable'? It's not a term defined in the Bill, though the proposed new Section 8 of the Fair Trading Act lists a set of factors intended to help courts recognise it when they see it. And it's not a term you see much used in everyday speech, either. But if you substituted 'disgustingly ratbag', you'd be pretty much there. 

It seems a bit odd that our existing legislation has a hole in it this big, but never mind, we're filling it in. While you can always argue about potential over-reach or under-reach, and the similar issues that crop up with the design of any legislation, the general thrust of the Bill ought to be welcome to everyone: to consumers, obviously, to economists, who recognise that markets if they're going to weave their magic need to work without oppression or deceit, and of course to the vast majority of businesses who operate decently.

The trouble has been, though, that the Aussies, who legislated for this back in 2010, came a cropper when one of their regulators tried to ping what they saw as an obvious candidate: in the Kobelt case, the Aussie High Court disagreed. That case had been brought by ASIC, the Aussie financial regulator, but the ACCC, who you'd imagine would normally be running the bulk of these unconscionability cases, was seriously rattled by the ASIC case falling over. I listened to ACCC Commissioner Sarah Court talk with some degree of passion about it at the RBB Economics conference last year and again at this year's CLPINZ conference

You can see why the Aussies were beginning to wonder if they needed something other than full 'unconscionability' - maybe some kind of 'unfair' provision - to catch stuff that looked pretty bad but didn't quite reach the statutory unconscionability threshold. And we might have to confront the same issue, given that our proposed legislation looks a lot like theirs.

But fear not. The good news, just this week, is that that the ACCC has scored a thumping great unconscionability win, and it looks as if the law might bite after all. This time, it was about the gross mis-selling by Telstra of mobile phone contracts to certain indigenous customers. The ACCC's statement is here, and there's a good piece in the Australian Financial Review (if you've got a sub) here.

Interestingly, despite admission of liability, apologies, and extensive remediation on Telstra's part, the agreed penalty which will be put to the courts by  the ACCC and Telstra for approval is a stonking A$50 million, which (I learn from the AFR article) would be the second largest consumer law fine in Australia, second only to the A$125 million imposed on Volkswagen for the "dieselgate" faking of emission tests (Volkswagen is apparently appealing, after a judge had upped the initial proposed penalty from A$75 million).

Hopefully our unconscionability provision, when it finally emerges blinking in the sunlight, won't be called on often. But it's good to know that it can be made to sheet home to the worst of the rogues and the bullies. To be honest, if I was asked which would I rather see criminalised first, cartel behaviour or odious pressure selling, I'd have to sit down and have a good think, and the answer mightn't be cartels.