Friday, March 23, 2007

Just Sometimes, The Free Market Sucks

First, we discover that Menu Foods factories in the US have been importing wheat from China rather than use local product. Then, we find that they clearly had not done their homework in terms of the permitted pesticides in China vs. the USA, and that their quality control of incoming ingredients is sadly lacking. The consequence seems likely to be the death of many pets across North America - some estimates as high as the thousands.

Then, on the CBC's business report, we find that this is actually good news. Units in Menu Foods Income Fund rose 30% today with the news that the toxin that has been killing pets is identified. The reporter explains that this is because it means that (a) the incident is 'isolated' and that nothing is fundamentally wrong at Menu Foods, and (b) it means the liability will be shared with the supplier of the tainted wheat.

I'm a believer in captalism and the free market, but there's no denying that sometimes the markets do things that make me shake my head.