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Impact of private label development across retail formats: Evidences from the Italian dairy market

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Author Info
Paolo Sckokai (Istituto di Economia Agro-alimentare, Piacenza, Italie)
Claudio Soregaroli () (Osservatorio Latte, Università Cattolica, 26100 Cremona, Italie)

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Abstract

In the European food sector private labels represent a relevant and increasing share of total sales. Focusing on price strategies, recent theoretical papers conclude that private label development should cause a decrease in the price of national brands, while some empirical studies do not support this prediction. The aim of this study is to explore this empirical relationship for the Italian dairy sector. Using retail sales data, we study how prices of national brands react to private label growth. We find that the impact of private label development on national brand prices is product specific: a negative impact is registered by industrial products such as butter and mascarpone and by highly differentiated products such as yogurt. Positive effect is found in the case of traditional cheeses produced by strong national brands

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Publisher Info
Article provided by INRA Department of Economics in its journal Review of Agricultural and Environmental Studies.

Volume (Year): 87 (2008)
Issue (Month): 2 ()
Pages: 27-47
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Handle: RePEc:rae:jourae:v:87:y:2008:i:2:p:27-47

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Related research
Keywords: private label; pricing; retail sector; dairy products;

Find related papers by JEL classification:
L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
M31 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Marketing

References listed on IDEAS
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  1. Soberman, David A. & Parker, Philip M., 2004. "Private labels: psychological versioning of typical consumer products," International Journal of Industrial Organization, Elsevier, vol. 22(6), pages 849-861, June. [Downloadable!] (restricted)
  2. Robert L. Steiner, 2004. "The Nature and Benefits of National Brand/Private Label Competition," Review of Industrial Organization, Springer, vol. 24(2), pages 105-127, 03. [Downloadable!]
  3. Mills, David E, 1995. "Why Retailers Sell Private Labels," Journal of Economics & Management Strategy, Blackwell Publishing, vol. 4(3), pages 509-28, Fall.
  4. K. Sudhir & Debabrata Talukdar, 2004. "Does Store Brand Patronage Improve Store Patronage?," Review of Industrial Organization, Springer, vol. 24(2), pages 143-160, 03. [Downloadable!]
  5. Bontems, Philippe & Monier-Dilhan, Sylvette & Requillart, Vincent, 1999. "Strategic Effects of Private Labels," European Review of Agricultural Economics, Oxford University Press for the Foundation for the European Review of Agricultural Economics, vol. 26(2), pages 147-65, June.
  6. Gabrielsen, Tommy Staahl & Sorgard, Lars, 2007. "Private labels, price rivalry, and public policy," European Economic Review, Elsevier, vol. 51(2), pages 403-424, February. [Downloadable!] (restricted)
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  7. Fair, Ray C, 1970. "The Estimation of Simultaneous Equation Models with Lagged Endogenous Variables and First Order Serially Correlated Errors," Econometrica, Econometric Society, vol. 38(3), pages 507-16, May. [Downloadable!] (restricted)
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