Imperfect Competition in the Fresh Fruit and Vegetable Industry
Do retailers exert market power in the fresh fruit and vegetables markets? In the EU countries, as the retail industry distributes a significant part of fruit and vegetables, a non competitive behavior might have significant impact on consumption, on surplus and welfare. In this paper, we shed some light on the degree of non-competitive distortions in the French fresh fruit and vegetable markets. We analyze the market of tomato. The analysis is based on aggregate data on final consumption and prices at both shipper and consumer levels in France. The structural model is composed of a system of demand equations, supply equations and pricing equations which include terms that capture the oligopoly and oligopsony power of the retail sector and that account for product differentiation. We show that: i) elasticity of demand varies during the year ii) the exercise of market power decreases over time iii) if markets were competitive, retail price would decrease by about 2% to 12% depending on the year while shipping price might be 10% to 54% higher than observed. As a general result quantities consumed would not change significantly. We conclude that the retail sector exerts a moderate market power.
|Date of creation:||2009|
|Contact details of provider:|| Web page: http://www.eaae.org|
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ags:eaa113:58116. 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: (AgEcon Search)
If references are entirely missing, you can add them using this form.