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Organic label and profits sharing in the French fluid milk market
[Label Bio et partage des profits sur le marché du lait liquide en France]

Author

Listed:
  • Zohra Bouamra-Mechemache

    (GREMAQ - Groupe de recherche en économie mathématique et quantitative - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique)

  • Céline Bonnet

    (GREMAQ - Groupe de recherche en économie mathématique et quantitative - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique)

Abstract

The paper assesses how the value added created by the existence of an organic label in a vertical chain is shared among manufacturers and retailers in the French uid milk market. Using a struc- tural econometric model of consumer substitution patterns and of vertical relationships, we show that organic label leads to a higher bargaining power in favor of manufacturer. Total margins are heterogeneous among products. They are lower for organic brands (37%) compared to conventional ones (52%). On the contrary, rms would bene t more from organic products than for conventional milk while our results suggest the opposite result for retailers.

Suggested Citation

  • Zohra Bouamra-Mechemache & Céline Bonnet, 2013. "Organic label and profits sharing in the French fluid milk market [Label Bio et partage des profits sur le marché du lait liquide en France]," Post-Print hal-02746459, HAL.
  • Handle: RePEc:hal:journl:hal-02746459
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    Cited by:

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    2. Haucap, Justus & Heimeshoff, Ulrich & Klein, Gordon J. & Rickert, Dennis & Wey, Christian, 2013. "Bargaining power in manufacturer-retailer relationships," DICE Discussion Papers 107, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).

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