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Market Power in UK Food Retailing


  • Tim Lloyd
  • Wyn Morgan


summary Deepening concentration in the food chain throughout Europe suggests antitrust authorities need to be ever vigilant to deter the use of market power. In this article, the authors highlight some of the problems that regulatory authorities face when collating evidence on the existence and use of market power in the food industry, not least the reticence of food suppliers to inform on supermarkets undertaking anti-competitive practices. The article argues that the systematic effects that anti-competitive practices have upon retail and producer prices offer economists the opportunity to detect the exercise of market power in publicly available aggregate data. Drawing on recent research, the article proposes a simple empirical test of the use of market power that is based on economic theory and complementary to extant sources of evidence. While the test does not measure the extent of market power, it does offer a tractable means of detecting its existence. The article summarises the findings from two recent academic papers in which the test has been applied. Results point to the existence of market power in all fresh food products that were assessed, corroborating both the conclusions of the first competition enquiry in 2000 and the recent decision to launch a further investigation into British supermarkets that is due to report in 2007. Copyright The Agricultural Ecomomics Society and the European Association of Agricultural Economists 2007.

Suggested Citation

  • Tim Lloyd & Wyn Morgan, 2007. "Market Power in UK Food Retailing," EuroChoices, The Agricultural Economics Society, vol. 6(3), pages 22-29, December.
  • Handle: RePEc:bla:eurcho:v:6:y:2007:i:3:p:22-29

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    References listed on IDEAS

    1. Muhammad, Andrew & Seale, James L. & Meade, Birgit Gisela Saager & Regmi, Anita, 2011. "International Evidence on Food Consumption Patterns: An Update Using 2005 International Comparison Program Data," Technical Bulletins 184306, United States Department of Agriculture, Economic Research Service.
    2. Silvia Coderoni & Laura Valli & Maurizio Canavari, 2015. "Climate Change Mitigation Options in the Italian Livestock Sector," EuroChoices, The Agricultural Economics Society, vol. 14(1), pages 17-24, April.
    3. Rafael Oliveira Silva & Luis Gustavo Barioni & Dominic Moran, 2015. "Greenhouse Gas Mitigation through Sustainable Intensification of Livestock Production in the Brazilian Cerrado," EuroChoices, The Agricultural Economics Society, vol. 14(1), pages 28-34, April.
    4. Hugo Valin & Ronald D. Sands & Dominique van der Mensbrugghe & Gerald C. Nelson & Helal Ahammad & Elodie Blanc & Benjamin Bodirsky & Shinichiro Fujimori & Tomoko Hasegawa & Petr Havlik & Edwina Heyhoe, 2014. "The future of food demand: understanding differences in global economic models," Agricultural Economics, International Association of Agricultural Economists, vol. 45(1), pages 51-67, January.
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    Cited by:

    1. Götz, Linde & von Cramon-Taubadel, Stephan & Kachel, Yael, 0. "Vertical Price Transmission in the International Fresh Fruit and Vegetable Supply Chain: Israeli Grapefruit Exports to the EU after Export Liberalisation," Quarterly Journal of International Agriculture, Humboldt-Universität zu Berlin, vol. 53.

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