Premium Private Labels, Supply Contracts, Market Segmentation, and Spot Prices

Pascale Bazoche, Giraud-Héraud Eric and Soler Louis-Georges
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Giraud-Héraud Eric: INRA-LORIA and Laboratoire d’Econométrie de l’Ecole Polytechnique, France
Soler Louis-Georges: INRA-LORIA. 65 Bd de Brandebourg, 94205, Ivry sur Seine, France

Journal of Agricultural & Food Industrial Organization, 2005, vol. 3, issue 1, 30

Abstract: In recent years, European retailers have modified the market segmentation in the meat and the fresh produce sectors by implementing new private labels which aim to guarantee higher quality and food safety. As a result, retailers impose more demanding production requirements and rely on contractual relationships with upstream producers. Meat and vegetables shelve spaces are now composed of generic products supplied from competitive spot markets, and premium private labels based on long term supply contracts. In this paper we propose a model of vertical relationships between producers and retailers in order to analyze the consequences of such strategies. In particular, we analyze the interest of producers to commit to these new private labels, their effects on spot market prices, and the resulting market segmentation between the spot market and supply contracts.

Keywords: retailing; private labels; supply contracts; captive supplies; spot prices (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (23)

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DOI: 10.2202/1542-0485.1087

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