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Buyer Market Power in UK Food Retailing


  • Lloyd, Tim A.
  • McCorriston, Steve
  • Morgan, C. Wyn
  • Weldegebriel, Habtu T.


The potential existence of buyer market power in UK food retailing has attracted the scrutiny of the UK's anti-trust authorities, culminating in the decision to launch the second of two comprehensive regulatory inquiries in recent years. Throughout, 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 quasireduced form retailer-producer pricing equations in which the presence of market power can be detected using readily available market data. Using a cointegrated vector autoregression, we find empirical results that are consistent with the presence of oligopsony power in all six food products investigated.

Suggested Citation

  • Lloyd, Tim A. & McCorriston, Steve & Morgan, C. Wyn & Weldegebriel, Habtu T., 2007. "Buyer Market Power in UK Food Retailing," Working Papers 46007, Scottish Agricultural College, Land Economy Research Group.
  • Handle: RePEc:ags:saclwp:46007

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    References listed on IDEAS

    1. Delipalla, Sophia & O'Donnell, Owen, 2001. "Estimating tax incidence, market power and market conduct: The European cigarette industry," International Journal of Industrial Organization, Elsevier, vol. 19(6), pages 885-908, May.
    2. Osterwald-Lenum, Michael, 1992. "A Note with Quantiles of the Asymptotic Distribution of the Maximum Likelihood Cointegration Rank Test Statistics," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(3), pages 461-472, August.
    3. Feuerstein, Switgard, 2002. "Do coffee roasters benefit from high prices of green coffee?," International Journal of Industrial Organization, Elsevier, vol. 20(1), pages 89-118, January.
    4. Cheung, Yin-Wong & Lai, Kon S, 1993. "Finite-Sample Sizes of Johansen's Likelihood Ration Tests for Conintegration," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 55(3), pages 313-328, August.
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    Cited by:

    1. Götz, Linde & von Cramon-Taubadel, Stephan & Kachel, Yael, 0. "Vertical Price Transmission in the International Fresh Fruit and Vegetable Supply Chain: Israeli Grapefruit Exports to the EU after Export Liberalisation," Quarterly Journal of International Agriculture, Humboldt-Universität zu Berlin, vol. 53.


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