Buyer Market Power in UK Food Retailing
AbstractThe potential existence of buyer market power in UK food retailing has attracted the scrutiny of the UK's anti-trust authorities, culminating in the decision to launch the second of two comprehensive regulatory inquiries in recent years. Throughout, detection of buyer power has been dogged by the paucity of reliable evidence of its existence. In this paper we present a simple theoretical model of oligopsony which delivers quasireduced form retailer-producer pricing equations in which the presence of market power can be detected using readily available market data. Using a cointegrated vector autoregression, we find empirical results that are consistent with the presence of oligopsony power in all six food products investigated.
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Bibliographic InfoPaper provided by Scottish Agricultural College, Land Economy Research Group in its series Working Papers with number 46007.
Date of creation: Nov 2007
Date of revision:
Buyer power; Cointegrated VARs; UK food industry; Agribusiness; Consumer/Household Economics;
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