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Private Label Expansion and Supermarket Milk Prices

Author

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  • Bonanno Alessandro

    (University of Connecticut-Storrs, USA)

  • Lopez Rigoberto A.

    (University of Connecticut-Storrs, USA)

Abstract

This article investigates the impacts of private labels (PLs) on fluid milk prices and price differentials using 2,759 supermarket-level observations from 10 cities. Non-parametric results reveal that although PL milk prices decrease as PL milk shares expand, eventually the effect is to increase the prices of manufacturers' brands as well as the price gap between private labels and manufacturers' brands. Econometric results further reveal that supermarkets exert some degree of price discrimination through controlling the brands of milk sold.

Suggested Citation

  • Bonanno Alessandro & Lopez Rigoberto A., 2005. "Private Label Expansion and Supermarket Milk Prices," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 3(1), pages 1-18, February.
    • Handle: RePEc:bpj:bjafio:v:3:y:2005:i:1:n:2
    DOI: 10.2202/1542-0485.1085
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    2. Rabinowitz, Adam. N. & Liu, Yizao, 2014. "The Impact of Regulatory Change on Retail Pricing: The New York State Milk Price Gouging Law," Agricultural and Resource Economics Review, Cambridge University Press, vol. 43(1), pages 178-192, April.
    3. Paolo Sckokai & Claudio Soregaroli, 2008. "Impact of private label development across retail formats: Evidences from the Italian dairy market," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 87(2), pages 27-47.
    4. Merlino, Valentina Maria & Massaglia, Stefano & Blanc, Simone & Brun, Filippo & Borra, Danielle, 2022. "Differences between Italian specialty milk in large-scale retailing distribution," Economia agro-alimentare / Food Economy, Italian Society of Agri-food Economics/Società Italiana di Economia Agro-Alimentare (SIEA), vol. 24(2), September.
    5. Zhuang, Yan & Dimitri, Carolyn & Jaenicke, Edward C., 2010. "Price Reactions And Organic Price Premiums For Private Label And Branded Milk," 115th Joint EAAE/AAEA Seminar, September 15-17, 2010, Freising-Weihenstephan, Germany 116388, European Association of Agricultural Economists.
    6. Cotterill, Ronald W., 2006. "Antitrust analysis of supermarkets: global concerns playing out in local markets," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(1), pages 1-16, March.
    7. Zhuang, Yan & Dimitri, Carolyn & Jaenicke, Edward C., 2009. "Consumer Choice of Private Label or National Brand: The case of organic and non-organic milk," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49207, Agricultural and Applied Economics Association.
    8. Tian, Li, 2006. "The Strategic Effect of Private Label in a Vertical Bargaining Model," Research Reports 170112, University of Connecticut, Food Marketing Policy Center.
    9. M. Tolga Akçura & Ram Bezawada & Ajay Kalra, 2012. "The Strategic Role of Private Labels on Retail Competition," Bogazici Journal, Review of Social, Economic and Administrative Studies, Bogazici University, Department of Economics, vol. 26(1), pages 1-25.
    10. Anania, Giovanni & Nisticò, Rosanna, 2014. "Price dispersion and seller heterogeneity in retail food markets," Food Policy, Elsevier, vol. 44(C), pages 190-201.
    11. Stefan Hirsch & Giulia Tiboldo & Rigoberto A. Lopez, 2018. "A tale of two Italian cities: brand-level milk demand and price competition," Applied Economics, Taylor & Francis Journals, vol. 50(49), pages 5239-5252, October.
    12. Olbrich, Rainer & Grewe, Gundula, 2013. "Proliferation of private labels in the groceries sector: The impact on category performance," Journal of Retailing and Consumer Services, Elsevier, vol. 20(2), pages 147-153.
    13. Valentina Maria Merlino & Stefano Massaglia & Simone Blanc & Filippo Brun & Danielle Borra, 2022. "Differences between Italian specialty milk in large-scale retailing distribution," Economia agro-alimentare, FrancoAngeli Editore, vol. 24(2), pages 1-28.
    14. Li, Xun & Wang, Rui & Lopez, Rigoberto A., 2016. "Energy Shock and Price Adjustment: National Brands vs. Private Labels of Retail Milk Products," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235613, Agricultural and Applied Economics Association.
    15. Jack (Xinlei) Chen & Om Narasimhan & George John & Tirtha Dhar, 2010. "An Empirical Investigation of Private Label Supply by National Label Producers," Marketing Science, INFORMS, vol. 29(4), pages 738-755, 07-08.
    16. Schroeter Christiane & Cai Xiaowei, 2012. "The Impact of Food Environment on Private Label versus Branded Produce Choice," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 10(1), pages 1-23, November.

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