What’s the price of Australian oysters got to do with the recent run on toilet paper, and buying a new car?
If you’re a market-going Australian, you may have noticed that about four years ago, the price of a dozen oysters rose sharply, from about $12 a dozen to $20 and beyond.
Of course it’s commonplace for us to see price fluctuations in the price of groceries and produce, especially at fresh food markets. It’s a function of the foundational relationship of economics – that between supply and demand.
Oysters, though, are a bit of an exception to that: at least at fresh food markets, the price of a dozen usually remains pretty set. Which makes it all the more unusual that a) their price jumped so much, and b) it jumped so uniformly from one fish monger to the next, around the same time.
Ask a fish-monger why this happened and they’ll likely tell you about an outbreak of Pacific Oyster Mortality Syndrome (POMS) – a sort of disease, that renders oysters unsuitable for eating – that occurred in Australia in 2016, decimating oyster supplies and forcing prices up.
But is this the full story, or just an angle which has been emphasised by the oyster farming industry to persuade the consumer to accept a price hike?
OK, POMS – but an $8 price hike?
I’m not suggesting that a POMS outbreak didn’t occur in 2016. Or that it wasn’t devastating to the industry. But it was localised to Tasmania. And although Tasmania is a supplier of spats (infant oyster crops) to other farming regions across Australia, the phenomenon of POMS was by 2016 a well-known risk to the billion-dollar Australian aquaculture industry; outbreaks had been occurring in different parts of Australia and New Zealand for years.
You might therefore think that, at least on a national basis, farmers were prepared to compensate for any supply impacts of a localised outbreak. And even if they weren’t, the impact to marketable oyster numbers would only have endured for a year or two, before the industry could return to pre-2016 supply levels.
But even now, four years on – and with no media reports of any shortages affecting the market – prices remain at $20.
So why haven’t we, as consumers, kicked up a fuss? Well, it’s probably because over the years we’ve been persuaded ever-so-subtly, through occasional media reports of POMS outbreaks and supply shortages, that the supply of oysters is fickle. That our access to oysters could be taken away at any time. And this belief in turn reduces how concerned we are with the price: ”What’s another $8 or $12 per dozen (oysters)! I’m lucky to be getting my hands on these things at all!”
In forming this belief, it’s perhaps a little concerning that as consumers, we tend to discount that the POMS mainstream media coverage is clearly industry-driven (so probably self-serving), and the distinct peculiarity that there’s never any news of a glut of oysters (which must surely also happen from time to time).
Toilet paper: same sh*t, different product
More recently, we’ve seen a similar phenomenon occur with the rush on toilet paper, where all the scenes of empty shelves and “per-customer” limits have led us to doubt whether the supply of toilet paper is sufficient to satisfy the level of demand during a pandemic. And while it’s probably nothing more than doubt – after all, how many times over the past few months have you been without toilet paper at the crucial time? – evidently that’s all it takes for the product to fly off the shelves.
Buyer beware (of fanciful COVID tales)
It’s fairly obvious why a buying frenzy has developed in favour of toilet paper. But “essentials” are far from the only products where COVID-related conditions – whether real or fanciful – will factor into the consumer’s decision-making process. And in many cases those decisions will be far more consequential than jumping the gun on your next twelve pack of double-ply rolls.
For example, last week I heard a story of a car salesman at a luxury car-yard in Melbourne suggesting to his prospective buyer that, due to freight and logistics challenges caused by COVID, Australia is about to face a severe shortage of new cars that could last for some time. The implication: buy now or run the risk of not being able to buy a new car for years!
This is of course probably a liberal over-exaggeration of what in actual fact is a small challenge faced by the Australian car industry – i.e. that cars are taking a few weeks longer to get to Australia from manufacturers due to COVID-related logistical disruptions. But embellishment that it may be, it is nonetheless an extremely savvy deployment of various persuasive techniques, where the salesman has insinuated (the old, “I shouldn’t be giving you this information….but you seem like a nice lady!“) that circumstances beyond either of their control threaten to deprive the buyer of an option she’s historically taken for granted – i.e. the option to buy a new car. It doesn’t matter that she may never have even considered buying a new car before; the mere threat of losing it as an option might just be enough to persuade her into exercising it immediately.
Conclusion: COVID = Perfect persuasion conditions
So consumers, be mindful over the coming weeks, months and years. Because in addition to any actual impacts COVID has on product markets, you can be certain that savvy sellers will be making the most of the favourable conditions – fear, uncertainty and misinformation – using every trick in the book to make you buy more and accept price hikes.