Sunday, August 05, 2007

OPEC: Organization of Petroleum Pizza Exporting Countries

From a Times article called "A Neighborhood Balks at a Chain Restaurant," about the resistance from local pizza shops in a Brooklyn neighborhood to a new Papa John's franchise (to be owned by 23-year-old Sandeep Singh). The most interesting sentence was in the last paragraph.

Some of Johnny’s competitors who signed the anti-Papa John’s petition are not taking the news any better. For years they worked in friendly rivalry, helping each other through tight spots.

“If we get short on cheese or tomatoes, we go to him or he comes to us,” said Gino Campese, the owner of Scotti’s Pizza. “When it’s time to raise prices, we get together. There’s room for everybody. But not for Papa John’s.”

I don't know. Maybe everyone would be better off if Papa John's stays out, because the entrance will trigger a race to the bottom of lousy pizza, albeit at cheaper prices. Maybe pizza-eaters don't know what's good for them, or at least aren't willing enough (from quality-pizza-makers' perspective) to pay for it.

But there's at least another story you could tell her about what's happening: it's a classic price-fixing cartel, which depends for its survival on enforcing barriers to entry. I was surprised to see the story take that turn at the end. But maybe I'm naive. Anyway, good luck with that, fellas!

1 comment:

Anonymous said...

Things are different here in Pittsburgh, I'm sure. In PGH, they would say, "When prices NEED RAISED, we get together." You see?