Delineating the Relevant U.S. Sweetener Markets
The relevant market in the U.S. sweetener complex was a subject of debate in the United States v. Archer-Daniels Midland, Co. & Nabisco court case, in which the defendants successfully argued that price fixing in the non-sugar sweetener market was impossible because sugar and high fructose corn syrup (HFCS) were substitutes. Hence, they were both part of the so-called relevant market. We use cointegration analysis to show that over a large period of time, sugar prices and HFCS were positively correlated. However, focusing only on the time period 1997 through 2001, sugar and HFCS prices are not correlated. This lack of correlation in the later period implies that beginning in 1997, the relevant market for HFCS does not include sugar. Thus questions are continuingly raised as to the competitiveness of the HFCS industry.
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Volume (Year): 2 (2004)
Issue (Month): 1 (January)
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