Italy helps consumers text their way to cheaper tomatoes

The Italian government has come up with a way keep produce sellers accountable to their customers, inform consumers, and, theoretically, make the food market more efficient through a text-message based service called SMS Consumatori.  (Crudely translated here.)  How it works:

1) Shopper notices that the price of a basket of cherry tomatoes at the corner produce stand is 5.60 Euros per kilo.  Hm, seems a bit steep.

2) Shopper sends a free text message to SMS Consumatori: “pomodori ciliegini 5,60€.”

3) SMS Consumatori instantly sends back current info from the Ministry of Agriculture’s database: the average wholesale price of cherry tomatoes (1.06€), plus the average regional retail price (2.60€) and the price in supermarkets, specialty stores, and produce stands.

4) Shopper decides she is getting gouged — the going rate in similar places is €4.50 — and either haggles over the price or chooses to shop elsewhere.

Seems like a potentially useful service for price-conscious consumers.  I floated the concept by an economist of the non-armchair type, Anwar Naseem, an assistant professor of agricultural economics at McGill University.

“Generally speaking, the more information a consumer has about a product, the more efficient and competitive the market will be, as the incentive for retailers to price-gouge will be minimized,” he said in an e-mail.  “In that respect this service should make the market efficient.  It will particularly benefit the most price sensitive consumers — usually the poor — whereas those who can afford to pay higher prices may not want to be bothered [to use the service] every time they buy tomatoes.”

It’s not likely that this would fly in the US.  “Retailing already is very competitive in the US,” Naseem asserted, “so there is very little gouging going on.” (Which is why monopolies are so gosh-darn fun.)  He pointed out that grocery shopping in the US is almost strictly limited to supermarkets, and a consumer would almost certainly just suck it up and pay the extra fifty cents per pound for overpriced tomatoes rather than waste time and gas to drive to another store.  (And imagine how the cashier at Ralph’s would react if you tried talking him down a buck-fifty.)  Besides, he said, the operating costs of such a program would be extremely high.

Still, in a fantasyland where A) really poor people have cell phones and B) the government has the infrastructure to track such data, a service like this could help keep consumers informed — maybe helping to take a bit of the mystery out of soaring food prices, and subsequently helping to keep the peace.

(What? Your definiton of fantasyland has no cell phones at all?  And rivers of wine and foie gras forests?  To each their own.)

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