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European Dairy Cooperative Strategies: Horizontal Integration Versus Diversity

Laurence Harte and John J. O’connell
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Laurence Harte: University College
John J. O’connell: University College

Chapter Chapter 11 in Vertical Markets and Cooperative Hierarchies, 2007, pp 195-211 from Springer

Abstract: Abstract Horizontal integration has been widely used by cooperative dairy processors in an effort to reduce costs. This is seen as a necessary condition for the payment of higher farm-gate milk prices. However, the observation that farm-gate milk prices are not consistently correlated with degree of horizontal integration raises questions about other factors. The aim here is to investigate the relationship between the farm-gate milk price and three variables, namely, degree of horizontal integration, degree of diversification and size irrespective of volume of milk processed or degree of diversification. A positive relationship with farm-gate milk price was found for all three variables but was relatively weak especially after a certain scale of operation in the case of horizontal integration.

Keywords: Somatic Cell Count; Strategic Management Journal; Diversification Strategy; International Diversification; Horizontal Integration (search for similar items in EconPapers)
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-1-4020-5543-0_11

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DOI: 10.1007/1-4020-5543-0_11

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