IDEAS home Printed from https://ideas.repec.org/a/bla/jindec/v65y2017i3p469-509.html
   My bibliography  Save this article

Retail Mergers and Food Prices: Evidence from France

Author

Listed:
  • Marie-Laure Allain
  • Claire Chambolle
  • Stéphane Turolla
  • Sofia B. Villas-Boas

Abstract

This paper analyzes the impact of a merger in the French supermarket industry on food prices. Using consumer panel data, we compare the changes in prices for merging and rival firms in affected and comparison markets. We use a novel definition of affected markets when some firms have a local pricing strategy and others a more centralized pricing strategy. We find that prices increase significantly following the merger, and that the merging firms lose market shares. For the rivals, the price increases are larger in local markets, in which concentration increased and differentiation changed after the merger. * We thank the Editor and two anonymous referees for their very valuable comments. We also thank
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Marie-Laure Allain & Claire Chambolle & Stéphane Turolla & Sofia B. Villas-Boas, 2017. "Retail Mergers and Food Prices: Evidence from France," Journal of Industrial Economics, Wiley Blackwell, vol. 65(3), pages 469-509, September.
    • Handle: RePEc:bla:jindec:v:65:y:2017:i:3:p:469-509
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/joie.12153
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Stéphane Turolla, 2016. "Spatial Competition in the French Supermarket Industry," Annals of Economics and Statistics, GENES, issue 121-122, pages 213-259.
    2. Davis David E., 2010. "Prices, Promotions, and Supermarket Mergers," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 8(1), pages 1-27, November.
    3. Joshua D. Angrist & Jörn-Steffen Pischke, 2010. "The Credibility Revolution in Empirical Economics: How Better Research Design Is Taking the Con out of Econometrics," Journal of Economic Perspectives, American Economic Association, vol. 24(2), pages 3-30, Spring.
    4. Allain, Marie-Laure & Chambolle, Claire, 2011. "Anti-competitive effects of resale-below-cost laws," International Journal of Industrial Organization, Elsevier, vol. 29(4), pages 373-385, July.
    5. Philippe Choné & Laurent Linnemer, 2012. "A Treatment Effect Method for Merger Analysis with an Application to Parking Prices in P aris," Journal of Industrial Economics, Wiley Blackwell, vol. 60(4), pages 631-656, December.
    6. Christopher T. Taylor & Daniel S. Hosken, 2007. "The Economic Effects Of The Marathon‐Ashland Joint Venture: The Importance Of Industry Supply Shocks And Vertical Market Structure," Journal of Industrial Economics, Wiley Blackwell, vol. 55(3), pages 419-451, September.
    7. Justine S. Hastings & Richard J. Gilbert, 2005. "Market Power, Vertical Integration And The Wholesale Price Of Gasoline," Journal of Industrial Economics, Wiley Blackwell, vol. 53(4), pages 469-492, December.
    8. repec:bla:scandj:v:104:y:2002:i:4:p:547-66 is not listed on IDEAS
    9. Aviv Nevo, 2000. "Mergers with Differentiated Products: The Case of the Ready-to-Eat Cereal Industry," RAND Journal of Economics, The RAND Corporation, vol. 31(3), pages 395-421, Autumn.
    10. Pierre Biscourp & Xavier Boutin & Thibaud Vergé, 2013. "The Effects of Retail Regulations on Prices: Evidence from the Loi Galland," Economic Journal, Royal Economic Society, vol. 123(12), pages 1279-1312, December.
    11. Wioletta Dziuda & Giovanni Mastrobuoni, 2009. "The Euro Changeover and Its Effects on Price Transparency and Inflation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 41(1), pages 101-129, February.
    12. Keisuke Hirano & Guido W. Imbens & Geert Ridder, 2003. "Efficient Estimation of Average Treatment Effects Using the Estimated Propensity Score," Econometrica, Econometric Society, vol. 71(4), pages 1161-1189, July.
    13. Aguzzoni, Luca & Argentesi, Elena & Ciari, Lorenzo & Duso, Tomaso & Tognoni, Massimo, 2016. "Ex-post Merger Evaluation in the U.K. Retail Market for Books," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 64(1), pages 170-200.
    14. Jerry Hausman & Ephraim Leibtag, 2007. "Consumer benefits from increased competition in shopping outlets: Measuring the effect of Wal-Mart," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(7), pages 1157-1177.
    15. Orley Ashenfelter & Daniel Hosken & Matthew Weinberg, 2014. "Did Robert Bork Understate the Competitive Impact of Mergers? Evidence from Consummated Mergers," Journal of Law and Economics, University of Chicago Press, vol. 57(S3), pages 67-100.
    16. Orley C. Ashenfelter & Daniel S. Hosken & Matthew C. Weinberg, 2013. "The Price Effects of a Large Merger of Manufacturers: A Case Study of Maytag-Whirlpool," American Economic Journal: Economic Policy, American Economic Association, vol. 5(1), pages 239-261, February.
    17. Howard Smith, 2004. "Supermarket Choice and Supermarket Competition in Market Equilibrium," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 71(1), pages 235-263.
    18. Orley C. Ashenfelter & Daniel S. Hosken & Matthew C. Weinberg, 2015. "Efficiencies brewed: pricing and consolidation in the US beer industry," RAND Journal of Economics, RAND Corporation, vol. 46(2), pages 328-361, June.
    19. Haucap, Justus & Heimeshoff, Ulrich & Klein, Gordon J. & Rickert, Dennis & Wey, Christian, 2013. "Inter-format competition among retailers: The role of private label products in market delineation," DICE Discussion Papers 101, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    20. Dario Focarelli & Fabio Panetta, 2003. "Are Mergers Beneficial to Consumers? Evidence from the Market for Bank Deposits," American Economic Review, American Economic Association, vol. 93(4), pages 1152-1172, September.
    21. Marcus Asplund & Richard Friberg, 2002. "Food Prices and Market Structure in Sweden," Scandinavian Journal of Economics, Wiley Blackwell, vol. 104(4), pages 547-566, December.
    22. Matthew C. Weinberg & Daniel Hosken, 2013. "Evidence on the Accuracy of Merger Simulations," The Review of Economics and Statistics, MIT Press, vol. 95(5), pages 1584-1600, December.
    23. Jean-Francois Houde, 2012. "Spatial Differentiation and Vertical Mergers in Retail Markets for Gasoline," American Economic Review, American Economic Association, vol. 102(5), pages 2147-2182, August.
    24. Aviv Nevo & Michael D. Whinston, 2010. "Taking the Dogma out of Econometrics: Structural Modeling and Credible Inference," Journal of Economic Perspectives, American Economic Association, vol. 24(2), pages 69-82, Spring.
    25. Guido W. Imbens, 2004. "Nonparametric Estimation of Average Treatment Effects Under Exogeneity: A Review," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 4-29, February.
    26. Justine S. Hastings, 2004. "Vertical Relationships and Competition in Retail Gasoline Markets: Empirical Evidence from Contract Changes in Southern California," American Economic Review, American Economic Association, vol. 94(1), pages 317-328, March.
    27. Emek Basker & Michael Noel, 2009. "The Evolving Food Chain: Competitive Effects of Wal‐Mart's Entry into the Supermarket Industry," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 18(4), pages 977-1009, December.
    28. Kathleen Cleeren & Frank Verboven & Marnik G. Dekimpe & Katrijn Gielens, 2010. "Intra- and Interformat Competition Among Discounters and Supermarkets," Marketing Science, INFORMS, vol. 29(3), pages 456-473, 05-06.
    29. Pierre Biscourp & Xavier Boutin & Thibaud Vergé, 2013. "The Effects of Retail Regulations on Prices: Evidence from the Loi Galland," Economic Journal, Royal Economic Society, vol. 123(12), pages 1279-1312, December.
    30. Orley Ashenfelter & Daniel Hosken, 2010. "The Effect of Mergers on Consumer Prices: Evidence from Five Mergers on the Enforcement Margin," Journal of Law and Economics, University of Chicago Press, vol. 53(3), pages 417-466.
    31. Maican, Florin & Orth, ´Matilda, 2013. "Entry Regulations, Product Differentiation and Determinants of Market Structure," Working Paper Series 984, Research Institute of Industrial Economics.
    32. Marie-Laure Allain & Claire Chambolle & Stéphane Turolla, 2016. "Local or national pricing : what consequences for merger control in the food retail sector ? [Política de precios local o nacional: ¿qué impacto tiene el control de las fusiones en el sector de la ," Post-Print hal-03542125, HAL.
    33. Levy, David T & Reitzes, James D, 1992. "Anticompetitive Effects of Mergers in Markets with Localized Competition," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 8(2), pages 427-440, April.
    34. Barros, Pedro Pita & Brito, Duarte & de Lucena, Diogo, 2006. "Mergers in the food retailing sector: An empirical investigation," European Economic Review, Elsevier, vol. 50(2), pages 447-468, February.
    35. Roman Inderst & Greg Shaffer, 2007. "Retail Mergers, Buyer Power and Product Variety," Economic Journal, Royal Economic Society, vol. 117(516), pages 45-67, January.
    36. Fabio Panetta & Dario Focarelli, 2003. "Are Mergers Beneficial to Consumers? Evidence from the Italian Market for Bank Deposits," CEIS Research Paper 10, Tor Vergata University, CEIS.
    37. Matthew C. Weinberg, 2011. "More Evidence on the Performance of Merger Simulations," American Economic Review, American Economic Association, vol. 101(3), pages 51-55, May.
    38. Paul W. Dobson & Michael Waterson, 2005. "Chain‐Store Pricing Across Local Markets," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 14(1), pages 93-119, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marie-Laure Allain & Claire Chambolle & Stéphane Turolla & Sofia B. Villas-Boas, 2013. "The Impact of Retail Mergers on Food Prices : Evidence from France," Working Papers 2013-18, Center for Research in Economics and Statistics.
    2. Ariane Charpin & Joanna Piechucka, 2020. "Merger Efficiency Gains: Evidence from a Large Transport Merger in France," Discussion Papers of DIW Berlin 1843, DIW Berlin, German Institute for Economic Research.
    3. Charpin, Ariane & Piechucka, Joanna, 2021. "Merger efficiency gains: Evidence from a large transport merger in france," International Journal of Industrial Organization, Elsevier, vol. 77(C).
    4. Genakos, Christos & Lamprinidis, Andreas & Walker, James, 2023. "Evaluating merger effects," LSE Research Online Documents on Economics 121325, London School of Economics and Political Science, LSE Library.
    5. Christos Genakos & Andreas Lamprinidis & James Walker, 2023. "Evaluating merger effects," CEP Discussion Papers dp1921, Centre for Economic Performance, LSE.
    6. Friberg, Richard & Romahn, André, 2015. "Divestiture requirements as a tool for competition policy: A case from the Swedish beer market," International Journal of Industrial Organization, Elsevier, vol. 42(C), pages 1-18.
    7. Orley Ashenfelter & Daniel Hosken & Matthew Weinberg, 2014. "Did Robert Bork Understate the Competitive Impact of Mergers? Evidence from Consummated Mergers," Journal of Law and Economics, University of Chicago Press, vol. 57(S3), pages 67-100.
    8. Christos Genakos & Andreas Lamprinidis & James Walker, 2023. "Evaluating merger effects," POID Working Papers 072, Centre for Economic Performance, LSE.
    9. Luca Aguzzoni & Elena Argentesi & Lorenzo Ciari & Tomaso Duso & Massimo Tognoni, 2016. "Ex post Merger Evaluation in the U.K. Retail Market for Books," Journal of Industrial Economics, Wiley Blackwell, vol. 64(1), pages 170-200, March.
    10. Daniel S. Hosken & Luke M. Olson & Loren K. Smith, 2018. "Do retail mergers affect competition? Evidence from grocery retailing," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 27(1), pages 3-22, March.
    11. Zulehner, Christine & Gugler, Klaus Peter & Weichselbaumer, Michael, 2015. "Analysis of mergers in first-price auctions," CEPR Discussion Papers 10799, C.E.P.R. Discussion Papers.
    12. Policarpo Garcia, Carolina & Furquim de Azevedo, Paulo, 2019. "Should competition authorities care about conglomerate mergers?," International Journal of Industrial Organization, Elsevier, vol. 66(C), pages 78-118.
    13. Koki Arai, 2017. "Ex-post examination of mergers: effects on retail prices," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 24(1-2), pages 145-162, April.
    14. Tiago Pires & André Trindade, 2018. "Ex-post Evaluation of Mergers in the Supermarket Industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 52(3), pages 473-496, May.
    15. Dennis Rickert & Jan Philip Schain & Joel Stiebale, 2021. "Local Market Structure and Consumer Prices: Evidence from a Retail Merger," Journal of Industrial Economics, Wiley Blackwell, vol. 69(3), pages 692-729, September.
    16. Joel Stiebale & Florian Szücs, 2022. "Mergers and market power: evidence from rivals' responses in European markets," RAND Journal of Economics, RAND Corporation, vol. 53(4), pages 678-702, December.
    17. Stephen Martin, 2012. "Market Structure and Market Performance," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 40(2), pages 87-108, March.
    18. Robert Kulick, 2017. "Ready-to-Mix: Horizontal Mergers, Prices, and Productivity," Working Papers 17-38, Center for Economic Studies, U.S. Census Bureau.
    19. Ivaldi, Marc & Zhang, Jiekai, 2020. "Platform Mergers: Lessons from a Case in the Digital TV Market," CEPR Discussion Papers 14895, C.E.P.R. Discussion Papers.
    20. Argentesi, Elena & Buccirossi, Paolo & Cervone, Roberto & Duso, Tomaso & Marrazzo, Alessia, 2016. "The effect of retail mergers on prices and variety: An ex-post evaluation," DICE Discussion Papers 225, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jindec:v:65:y:2017:i:3:p:469-509. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.