Do Slotting Allowances Harm Retail Competition?

Øystein Foros and Hans Jarle Kind

No 1800, CESifo Working Paper Series from CESifo

Abstract: Slotting allowances are fees paid by manufacturers to get access to retailers’ shelf space. Both in the USA and Europe, the use of slotting allowances has attracted attention in the general press as well as among policy makers and economists. One school of thought claims that slotting allowances are efficiency enhancing, while another school of thought maintains that slotting allowances are used in an anti-competitive manner. In this paper, we argue that this controversy is partially caused by inadequate assumptions of how the retail market is structured and organized. Using a formal model, we show that there are good reasons to expect anti-competitive effects of slotting allowances. We further point out that competition authorities tend to use an unsatisfactory basis for comparison when analyzing welfare consequences of slotting allowances.

Keywords: slotting allowances; retail competition; anti-trust policy (search for similar items in EconPapers)
JEL-codes: L13 L42 L81 (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-com
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Do Slotting Allowances Harm Retail Competition?* (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_1800

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