There have been calls, because of rising prices, for the scrapping of the monopoly of the sole distributor of mainland cattle in Hong Kong, Ng Fung Hong.
The company has raised the wholesale price of cattle five times this year and this has not been well-received by the public.
However, I do not agree that taking away the monopoly will benefit Hong Kong at all. We should keep it, and try to solve this problem through other means.
First of all, I think that Ng Fung Hong's price rises are simply honest reflections of increased demand and higher production costs. Hong Kong consumers are constantly competing with their mainland counterparts for beef, and with the rising wealth of mainlanders, they can afford to pay more for the cattle. Add to that the appreciation of the renminbi and inflation on the mainland, all of these factors are driving up the price of beef.
Second, abolishing the monopoly will just make things worse. Monopolies have leverage in negotiating business deals.
Mainland beef suppliers have no one else to turn to if they want to sell in Hong Kong. Add competition to the market, and those same suppliers could just turn to someone else to sell their stock in Hong Kong.