Imperfect Competition in the Fresh Fruit and Vegetable Industry

Vincent Réquillart, Michel Simioni and Xose Luis Varela Irimia
Authors registered in the RePEc Author Service: Xose-Luis Varela-Irimia

No 58116, 113th Seminar, September 3-6, 2009, Chania, Crete, Greece from European Association of Agricultural Economists

Abstract: 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.

Keywords: Agricultural; and; Food; Policy (search for similar items in EconPapers)
Pages: 12
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaa113:58116

DOI: 10.22004/ag.econ.58116

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