Thursday, July 12, 2012

Municipality requires Supermarket to help the Poor

The Walloon daily L'Avenir reports about a new supermarket in Herstal that is required, as a condition of its permit, to give away all the food that it doesn't sell to food banks for the poor:
Herstal: les supermarchés obligés d’aider les démunis 
HERSTAL - En matière d’action sociale, la commune d’Herstal a innové en inscrivant dans le nouveau permis d’exploitation du magasin «Carrefour» une obligation de donner ses invendus aux démunis.

Cette initiative est à mettre à l’actif du député européen et bourgmestre d’Herstal, Frédéric Daerden. «Dans le cadre de mon action d’eurodéputé, j’ai été confronté au problème d’aide alimentaire, explique le fils de «Papa». Dans ce contexte, j’ai rencontré les banques alimentaires qui m’ont fait part de leurs problèmes, tant au point de vue financier qu’au niveau des stocks.»
L’envie d’aider les associations était donc présente dans le chef du bourgmestre. «Quand il a fallu renouveler le permis d’exploitation du Carrefour d’Herstal, je me suis dit qu’il fallait saisir l’opportunité, poursuit-il. Le Collègue communal a donc inscrit dans le nouveau permis une obligation de mettre les invendus à la disponibilité des associations.»

Une décision qui permet d’éviter les gaspillages. «La grande surface doit s’organiser en interne pour pouvoir stocker la nourriture invendue dans un espace tampon, détaille Frédéric Daerden. Libre aux associations de venir les chercher par après.» Deux associations («Espoir et fraternité» et «La cordée») se sont déjà montrées intéressées. 
Bientôt la même action ailleurs en Wallonie ?Si cette mesure n’est actuellement effective que dans une grande surface d’Herstal, l’objectif est bien de l’étendre dans toute la région liégeoise. Et pas seulement. «Nous allons inscrire cette obligation à chaque renouvellement de permis des moyennes et grandes surfaces d’Herstal, explique fièrement le bourgmestre. Mais je peux déjà dire que plusieurs collègues m’ont contacté pour lancer le même projet dans leur commune respective.»

Difficile cependant de savoir quelles seront les grandes surfaces concernées. «Pour inscrire cette obligation, il faut qu’un permis arrive à échéance», détaille Frédéric Daerden. 
Une mesure qui ne fait pas l’unanimitéSi Frédéric Daerden se réjouit de cette nouvelle mesure, ce n’est pas le cas de tout le monde. Herman van Breen, délégué national d’ATD Quart Monde en Belgique, a réagi chez nos collègues de la rtbf. «On leur donne des miettes qui tombent et puis on leur dit de se débrouiller avec.» 
Une réaction que regrette l’eurodéputé liégeois. «Évidemment que ce n’est pas révolutionnaire mais je trouve cette réaction très défaitiste. Ce n’est pas avec un magasin que nous allons régler le problème, mais l’envie d’étendre la mesure est bien présente.»
This idea is interesting on several levels. To begin with the lawyerly one, as always:

It is not entirely clear to me why a supermarket needs a permit of any kind. The article simply speaks about a "permis d'exploitation", an operating permit, and some quick Googling also didn't make things any clearer. However, as a general matter permits are required for a reason, they serve to allow the public authorities to protect a certain public interest that might otherwise be neglected. It follows, the courts have long opined, that the public authority is not allowed to use its power to award or refuse permits for any reason other than the reasons contemplated by law. The government may not refuse to give you a driving license on the grounds that you owe them back taxes, but only on for the reason that you're a horrible driver, or because your license has been suspended by the courts. Where it does otherwise, the public authority is guilty of "détournement de pouvoir", i.e. abuse of authority. (Art. 263(2) TFEU translates the concept as "misuse of powers", which, I guess, is a little bit less on the nose.) So with the emphatic proviso that I do not know the legal basis for this permit requirement, I would suggest tentatively that there is a case for détournement de pouvoir here.

From an economics point of view, this case represents a slightly different situation than the one I'm most familiar with: concessions. In a concession, the fact that the private party obtains the right to do business is only part of the story. At the same time, a sum of money flows from the government to the private party or the other way, depending on whether the business in question allows for economic rents or not. In that case, anything the government does in the way of extra requirements, conditions or rules immediately translates into a higher or lower economic rent for the private business, and therefore a higher or lower subsidy. In other words: anything the government wants, it has to pay for left or right. If the Dutch government wants toilets in all trains and at all train stations, it has to accept that this will reduce the profitability of NS and ProRail, and that the government will therefore have to make do with a lower concession payment and dividend from these companies. (Or, alternatively, a higher ticket price for consumers.) The government can have whatever it wants, as long as it is willing to pay for it.

But here, there is no money flow between the supermarket and the city. Whatever the city does to the profitability of the private company, it won't feel it in its own purse. This brave mayor is simply spending other people's money. (Not just the money of Carrefour, but also, to some extent, the money of Carrefour's customers who will have to put up with a small price increase.) And, as Mrs. Thatcher told us long ago, the problem with spending other people's money is that it has the annoying habit of eventually running out. We know that this rule costs money, even though the food in question would have otherwise been thrown away, because if all of this generosity involved no cost Carrefour would have done it already of its own accord.

And this, in the end, is the rationale for the rule against détournement de pouvoir. The legislature, in its infinite wisdom, creates a permit requirement. In so doing, it weighs the social costs and benefits: on the one hand, the permit requirement imposes a cost on private citizens, and on the other hand it promotes the public good. If suddenly the cities that are meant to carry out this law start using it to promote all sorts of other public goals, there is no longer any guarantee that the benefits will exceed the costs. They  might. And a particularly overconscientious mayor might even do a cost/benefit analysis himself, but ultimately he is not empowered to make that decision. Only the legislature, relying on the expertise of the - in the Belgian case - regional executive branch, decides how much of which public benefit is worth how much in costs for the private sector. So however nice this Belgian mayor sounds, I think it is safer for everyone if he just goes back to carrying out the law instead of making up new rules. If he wants to help the poor, let him pay for it with municipal tax money. (If the law allows this, which it may or may not.)

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