Column by Stefan Meyerhans: Prevention is better than cure

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Last year—once again—I managed to save a triple-digit million. For post office and public transport alone this amounted to 120 million francs. So much money, how did this happen?

Many people would like to understand the operation of a price monitor as setting or lowering prices – for example, during inflation. In special cases I can do this, but usually in a market economy it is not required and is not necessary. An important pillar is free competition, which – when it works properly – automatically equalizes prices more efficiently than humans could ever do. Or, to put it another way: effective competition is the best tool for controlling prices.

The big “but” is that competition doesn’t exist everywhere, or that people don’t want it everywhere. In this country, about a third of all prices are determined or influenced by the public sector. In addition, naturally, there are also monopolies that will build competing electricity grids or water pipelines, as well as companies with market power. When it comes to their products and services, the competition is ignored, so to speak, and the human-system co-pilot must ensure that prices do not get out of control.

My “clients” usually know the legal rules of the game: they can or should consult me ​​before setting or changing prices. In 2023 alone, approximately 600 municipal, cantonal and federal authorities, as well as various market companies such as public transport companies or post offices, have done so.

Many of my “clients” ask my opinion during the planning stage. If I see problems during an exam, I report them and make suggestions or discuss solutions. Thus, many problematic prices do not even reach you.

You will rarely hear me set prices unilaterally. Because a price order is a last resort and usually not the best. Price orders typically lead to years of costly legal disputes. Once price becomes legally binding, it’s likely that the next change will be knocking on the door. This is why the Price Monitoring Act provides for amicable solutions as a silver bullet that take effect between “immediately” and “a few months from now.” Not only are they more cost-effective, but they usually have a preventive effect: I can usually close them before the price goes up by the advertised amount and price abuse actually occurs. This usually benefits everyone involved in the process.

Source: Blick