Controlling abusive pricing

Those who imagine that there is no control over the prices of products sold in the physical or electronic market are mistaken.

Although the Constitution guarantees free trade and freedom of business practice, two aspects deserve further investigation.
The first is contained within the role of CADE, which, in addition to addressing abuse, also oversees the regulation of prices practiced in the markets and the regulation of inflation control.

Fortunately, it is a small minority that allows itself to practice abusive pricing, and the oversight, at least, has not been functioning as it should.

We are not talking about times of recession, catastrophes or tragedies, such as in the US, when some merchants, by practicing prices outside the standard, suffered very high collective penalties and were held responsible for paying compensation with the understanding that they would never again return to the mechanism that is harmful to society.

In Brazil, invariably, on certain occasions, such as Carnival, New Year's Eve, and others, the hotel industry in general, air transport, and similar services constantly raise the prices of goods and services.

There is a sense of concern from the federal government regarding Rio de Janeiro, due to events that will take place soon, as this situation cannot be tolerated, since it not only scares away domestic tourism but also foreign tourism.

However, in Brazil and in large cities, certain establishments abuse prices and feel immune to inspection and unpunished by sanctions.

What would be the technique for determining if a price is excessive? It's truly difficult to reach a common denominator, but common sense and normal pricing allow us a more detailed assessment.

Let's consider the price of a coffee, which can vary from R$3,00 to R$6,00 depending on its conditions. If a certain establishment charges R$9,00 for the same product, something is wrong and far out of line.

The profit he generates is excessive and violates all the principles that govern market rules, harming an indeterminate number of people.

Apparently, if a certain pharmacy sells a medicine, for example, at the price of R$ 50,00, and the identical medicine, in another pharmacy, is sold for double the price, this constitutes a true abuse and the need for inspection and public agents to signal something.

This is what happens today, with common practice in parking lots in large cities; parking for more than an hour has become a complex equation, as the price can reach more than 5% of the minimum wage, and the situation is made worse by the lack of competition.

Here's a key point to explore: we have a closed economy and very little competition. Therefore, the few entrepreneurs who are active in the sector feel entitled to charge whatever they want, because the mistaken concept that we live in a fully globalized world, where prices are dictated by those who provide services or sell their products, has always been prevalent.

Notably, those deemed essential cannot be sold at an abusive, harmful price that is out of reach of the market.

It's time to wake up to the variation; it's not a matter of supply and demand, since competition is minimal, and the State doesn't oversee it, offering nothing more. Therefore, it's plausible that entities, such as Procon (Brazilian consumer protection agency), begin to voice their concerns and present comparative price tables.

Ultimately, there won't be a night-and-day difference between a given service or product, and everything can have parameters.
The goal is not to impose a fixed price or a set price list, but rather to establish a rational, fair price so that consumers have a good benchmark and a range of options to choose from.

The moment is very auspicious for the authorities, and especially the Central Bank, to adjust inflation targets, once prices are regulated according to the market, and for those who defend Gerson's Law to be subjected to intense scrutiny. The purpose is to explain the composition of prices and to verify, within the specific framework, whether excessive profits represent inertial competition that hinders the growth and development of the country and is therefore subject to regulatory control.