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European Dairy Cooperative Strategies: Horizontal Integration Versus Diversity

In: Vertical Markets and Cooperative Hierarchies

Author

Listed:
  • Laurence Harte

    (University College)

  • John J. O’connell

    (University College)

Abstract

Horizontal integration has been widely used by cooperative dairy processors in an effort to reduce costs. This is seen as a necessary condition for the payment of higher farm-gate milk prices. However, the observation that farm-gate milk prices are not consistently correlated with degree of horizontal integration raises questions about other factors. The aim here is to investigate the relationship between the farm-gate milk price and three variables, namely, degree of horizontal integration, degree of diversification and size irrespective of volume of milk processed or degree of diversification. A positive relationship with farm-gate milk price was found for all three variables but was relatively weak especially after a certain scale of operation in the case of horizontal integration.

Suggested Citation

  • Laurence Harte & John J. O’connell, 2007. "European Dairy Cooperative Strategies: Horizontal Integration Versus Diversity," Springer Books, in: Vertical Markets and Cooperative Hierarchies, chapter 0, pages 195-211, Springer.
    • Handle: RePEc:spr:sprchp:978-1-4020-5543-0_11
    DOI: 10.1007/1-4020-5543-0_11
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    Cited by:

    1. Hannah K. Westerholz & Julia Höhler, 2022. "Corporate social responsibility reporting in the food industry—Comparison of co‐operatives and investor‐owned dairies," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(1), pages 211-222, January.

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