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Proprietary Varieties’ Influence on Economics and Competitiveness in Land Use within the Hop Industry

Author

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  • Douglas MacKinnon

    (Department of Agriculture Economics and Rural Development, Faculty of Agriculture and Life Sciences, University of Maribor, 3211 Hoče, Slovenia)

  • Martin Pavlovič

    (Department of Agriculture Economics and Rural Development, Faculty of Agriculture and Life Sciences, University of Maribor, 3211 Hoče, Slovenia
    Slovenian Institute of Hop Research and Brewing, 3310 Žalec, Slovenia)

Abstract

To evaluate changes to hop industry concentration and competitiveness the Herfindahl-Hirschman Index (HHI) was used. The ownership of hop proprietary varieties, their acreage and production were compared with public varieties. Market share for each proprietary hop variety acreage and production was calculated between 2000 and 2020. The quantity of land under centralized control in the U.S. hop industry due to increased proprietary variety acreage between 2000 and 2020 was quantified. Assuming tacit collusion between the participants in the oligopoly, the HHI enabled us to quantify the portion of land under oligopoly control. The HHI analysis of hop acreage and hop production demonstrated that market concentration rose rapidly between the years 2010 (0.0376 and 0.0729) and 2020 (0.4927 and 0.5394). This resulted in decreasing business competitiveness within the market during this period caused primarily by rapid consolidation of ownership during increased proprietary variety acreage and production increases. Calculations revealed that in 2016 a tipping point had been reached concerning market concentration, which resulted in higher sustained season average prices of hops—a key raw material in brewing.

Suggested Citation

  • Douglas MacKinnon & Martin Pavlovič, 2023. "Proprietary Varieties’ Influence on Economics and Competitiveness in Land Use within the Hop Industry," Land, MDPI, vol. 12(3), pages 1-12, March.
    • Handle: RePEc:gam:jlands:v:12:y:2023:i:3:p:598-:d:1086011
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    References listed on IDEAS

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