IDEAS home Printed from
   My bibliography  Save this article

Buyer Power in U.K. Food Retailing: A 'First-Pass' Test


  • Lloyd Tim

    (University of Nottingham)

  • McCorriston Steve

    (University of Exeter)

  • Morgan Wyn

    (University of Nottingham)

  • Rayner Anthony

    (University of Nottingham)

  • Weldegebriel Habtu

    (University of Warwick)


The potential existence of buyer power in U.K. food retailing has attracted the scrutiny of the U.K.'s anti-trust authorities, culminating in the second of two comprehensive regulatory inquiries in recent years. Such inquiries are authoritative but correspondingly time-consuming and costly. Moreover, 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 quasi-reduced form retailer-producer pricing equations with which the null of perfect competition can be tested using readily available market data. Using a cointegrated vector autoregression, we find empirical results that show the null of perfect competition can be rejected in seven of the nine food products investigated. Though not conclusive on the existence of buyer power, the proposed test offers a means via which the behaviour of the retail-producer price spread is consistent with it. At the very least, it can corroborate the concerns of the anti-trust authorities as to whether buyer power is potentially one source of concern.

Suggested Citation

  • Lloyd Tim & McCorriston Steve & Morgan Wyn & Rayner Anthony & Weldegebriel Habtu, 2009. "Buyer Power in U.K. Food Retailing: A 'First-Pass' Test," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 7(1), pages 1-40, May.
  • Handle: RePEc:bpj:bjafio:v:7:y:2009:i:1:n:5

    Download full text from publisher

    File URL:
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. Xiaodong Du & David A. Hennessy & William M. Edwards, 2007. "Determinants of Iowa Cropland Cash Rental Rates: Testing Ricardian Rent Theory," Center for Agricultural and Rural Development (CARD) Publications 07-wp454, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    2. Sergio H. Lence & Ashok K. Mishra, 2003. "The Impacts of Different Farm Programs on Cash Rents," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(3), pages 753-761.
    3. Yoder, Jonathan & Hossain, Ishrat & Epplin, Francis & Doye, Damona, 2008. "Contract duration and the division of labor in agricultural land leases," Journal of Economic Behavior & Organization, Elsevier, vol. 65(3-4), pages 714-733, March.
    4. Lyubov A. Kurkalova & Christopher Burkart & Silvia Secchi, 2004. "Cropland Cash Rental Rates in the Upper Mississippi River Basin," Center for Agricultural and Rural Development (CARD) Publications 04-tr47, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Roberto Furesi & Fabio A. Madau & Pietro Pulina, 2013. "Potere della distribuzione moderna nelle filiere agroalimentari: il caso dell’olio d’oliva in Italia," ECONOMIA AGRO-ALIMENTARE, FrancoAngeli Editore, vol. 15(1), pages 123-143.
    2. Octavio Fernández Amador & Josef Baumgartner & Jesús Crespo Cuaresma, "undated". "Milking the Prices: The Role of Asymmetries in the Price Transmission Mechanism for Milk Products in Austria," WIFO Working Papers 378, WIFO.
    3. Johan F.M. Swinnen & Anneleen Vandeplas, 2010. "Market power and rents in global supply chains," Agricultural Economics, International Association of Agricultural Economists, vol. 41(s1), pages 109-120, November.
    4. Daniele CAVICCHIOLI, 2013. "Detecting market power along food supply chains: evidence from the fluid milk sector in Italy," Departmental Working Papers 2013-01, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano, revised 30 Jan 2013.
    5. Cavicchioli, Daniele & Cacchiarelli, Luca & Pretolani, Roberto, 2016. "Should we cry over the spilt milk? Market power and structural change along dairy supply chains in EU Countries," 149th Seminar, October 27-28, 2016, Rennes, France 245160, European Association of Agricultural Economists.
    6. repec:bla:jageco:v:68:y:2017:i:1:p:3-21 is not listed on IDEAS

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:bjafio:v:7:y:2009:i:1:n:5. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.