Is Producing a Private Label Counterproductive for a Branded Manufacturer?

Fabian Bergès and Zohra Mechemache

No 09-130, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: Branded food manufacturers vindicate the use of excess production capacities (idle otherwise) to justify their production of retailers' brands. We study the distributor and food manufacturer's private label strategy for production within a framework featuring endogenous store brand quality, bargaining power, possible differences in production technology and potential capacity constraint for the branded manufacturer. According to the structure of capacity constraint (applying to both products or private label only), the retailer may prefer to choose an independent firm whereas he selected the branded manufacturer when unconstrained. The conclusions of our article thus partially confirm branded manufacturers' thinking: they may produce store brands when they are not capacity constrained

JEL-codes: L11 L13 Q13 (search for similar items in EconPapers)
Date: 2009-12
New Economics Papers: this item is included in nep-agr, nep-bec, nep-mic and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Is producing a private label counterproductive for a branded manufacturer? (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:22262

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