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Premium Private Labels, Supply Contracts, Market Segmentation, and Spot Prices

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Author Info

  • Bazoche Pascale

    (INRA-LORIA and Laboratoire d’Econométrie de l’Ecole Polytechnique, France)

  • Giraud-Héraud Eric

    (INRA-LORIA and Laboratoire d’Econométrie de l’Ecole Polytechnique, France)

  • Soler Louis-Georges

    (INRA-LORIA. 65 Bd de Brandebourg, 94205, Ivry sur Seine, France)

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    Abstract

    In recent years, European retailers have modified the market segmentation in the meat and the fresh produce sectors by implementing new private labels which aim to guarantee higher quality and food safety. As a result, retailers impose more demanding production requirements and rely on contractual relationships with upstream producers. Meat and vegetables shelve spaces are now composed of generic products supplied from competitive spot markets, and premium private labels based on long term supply contracts. In this paper we propose a model of vertical relationships between producers and retailers in order to analyze the consequences of such strategies. In particular, we analyze the interest of producers to commit to these new private labels, their effects on spot market prices, and the resulting market segmentation between the spot market and supply contracts.

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    Bibliographic Info

    Article provided by De Gruyter in its journal Journal of Agricultural & Food Industrial Organization.

    Volume (Year): 3 (2005)
    Issue (Month): 1 (February)
    Pages: 1-30

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    Handle: RePEc:bpj:bjafio:v:3:y:2005:i:1:n:7

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    Web: http://www.degruyter.com/view/j/jafio

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    Cited by:
    1. Vanessa von Schlippenbach & Isabel Teichmann, 2011. "The Strategic Use of Private Quality Standards in Food Supply Chains," Discussion Papers of DIW Berlin 1120, DIW Berlin, German Institute for Economic Research.
    2. Giraud-Heraud, Eric & Grazia, Cristina & Hammoudi, Abdelhakim, 2007. "Agrifood safety standards, market power and consumer misperceptions," 105th Seminar, March 8-10, 2007, Bologna, Italy 7849, European Association of Agricultural Economists.
    3. Venturini, Luciano, 2006. "Vertical competition between manufacturers and retailers and upstream incentives to innovate and differentiate," 98th Seminar, June 29-July 2, 2006, Chania, Crete, Greece 10050, European Association of Agricultural Economists.
    4. Combris, Pierre & Pinto, Alexandra Seabra & Fragata, Antonio & Giraud-Heraud, Eric, 2007. "Does taste beat food safety? Evidence from the “Pera Rocha” case in Portugal," 105th Seminar, March 8-10, 2007, Bologna, Italy 7879, European Association of Agricultural Economists.

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