According to the Daily Show, syrup related crime was exploding across Canada during 2012. Actually it was just one warehouse where, replaced by water, the maple syrup had been siphoned out.
$18 million dollars of maple syrup.
Barrels of maple syrup in a reserve warehouse in Quebec:
Selling for $1800 a barrel during 2012, maple syrup was (and still is) far more expensive than West Texas Crude. Still though, because no one expected a syrup robbery, there were no alarms, no cameras, flimsy locks. Rather easily, during an entire year or so, more than 20 people trucked the syrup to black market sources in Canada and the U.S. Once the heist was discovered, the gang was apprehended but little money and syrup were recovered.
Where are we going? To why Canada has a maple syrup reserve.
The Global Strategic Maple Syrup Reserve
You might be wondering why there was so much syrup in one place. The reason is Canada’s maple syrup reserve. Created by producers, the goal is stable prices.
On the supply side, optimal sap requires cold nights and temperate days that no one can guarantee. On the demand side, syrup is a discretionary purchase that fluctuates. The solution is a legal cartel called the Federation of Quebec Maple Syrup Producers–sort of like OPEC only enforceable. The reserve buys the syrup from more than 7,000 producers and then sells it to a small number of bulk buyers. Like Goldilocks, the people who run the reserve make sure there is not too much syrup nor too little but just the right amount that supply and demand require. As a result, what had been described as a whiplash industry became stable.
Not all though are pleased. Saying they believe in the market, some producers had their syrup seized because they refused to comply with the reserve. The Canadian courts though have confirmed the Federation’s enforcement rights.
Our Bottom Line: Adam Smith
Way back in 1776, in his Wealth of Nations, Adam Smith told us that, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” But, right after he said, “It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.”
Maybe the heist is about more than one warehouse robbery?