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Oligopoly and price transmission in Turkey's fluid milk market

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  • Hasan Tekguc

    (Mardin Artuklu Univeristy)

Abstract

Farmers and consumers suspect that processing firms abuse their power in the milk marketing chain. We employ threshold autoregressive and moment threshold autoregressive tests and contrary to expectations find evidence of a downward trend in wholesale milk price without a corresponding decline in farm-gate prices. The downward trend coincides with increased competition in the dairy industry and with the growing market share of the formal sector at the expense of the informal sector. Major dairy processing firms expand their market share and still enjoy healthy profits thanks to increasing returns to scale in processing and distribution in a growing market.

Suggested Citation

  • Hasan Tekguc, 2010. "Oligopoly and price transmission in Turkey's fluid milk market," Working Papers 2011-03, Mardin Artuklu Univeristy, Department of Economics.
    • Handle: RePEc:mrd:martwp:2011-03
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    References listed on IDEAS

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    1. S McCorriston & CW Morgan & AJ Rayner, 2001. "Price transmission: the interaction between market power and returns to scale," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 28(2), pages 143-159, June.
    2. Aydin Celen & Tarkan Erdogan & Tarkan Erdogan, 2005. "Fast Moving Consumer Goods: Competitive Conditions and Policies," ERC Working Papers 0503, ERC - Economic Research Center, Middle East Technical University, revised Jun 2005.
    3. von Cramon-Taubadel, Stephan, 1998. "Estimating Asymmetric Price Transmission with the Error Correction Representation: An application to the German Pork Market," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 25(1), pages 1-18.
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    More about this item

    Keywords

    Dairy; Oligopoly; TAR; M-TAR; Turkey;
    All these keywords.

    JEL classification:

    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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