IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Structural implications of vertical relationships between manufacturing and retailing

Listed author(s):
  • Pellegrini Luca
Registered author(s):

    The paper reviews the implications of vertical relationships in the fast moving consumer goods markets. Concentration in retailing has changed the balance of power between large brand manufacturers and retailers, making effective the countervailing power that Galbright pointed out in his 1952 book. Through the allocation of space in their stores and selective delisting of products from their assortments, large retailers can obtain lower prices from their suppliers which are then passed on to consumers. Rents obtained by brand manufacturers are reduced and, to improve their margins, they are also lead to dealing more aggressively with their own suppliers. In this way competition in retailing spills over vertically and improves the efficiency of the entire value chain. Moreover, retailers also challenge the market power of their suppliers offering to consumers their own brands. This plays as an indirect stimulus to innovation as manufacturers have to propose new products to make more difficult to retailers to copy existing ones and obtain part of their market. Therefore, it is emphasized how a competitive retail system has widespread implications on the overall efficiency of the economy.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: Access to full text is restricted to subscribers

    File URL:
    Download Restriction: no

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by Società editrice il Mulino in its journal Economia dei Servizi.

    Volume (Year): (2008)
    Issue (Month): 2 ()
    Pages: 225-236

    in new window

    Handle: RePEc:mul:j1t56u:doi:10.2382/27349:y:2008:i:2:p:225-236
    Contact details of provider: Web page:

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:mul:j1t56u:doi:10.2382/27349:y:2008:i:2:p:225-236. 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: ()

    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.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 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.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.