Organic label and profits sharing in the French fluid milk market

Céline Bonnet and Zohra Mechemache

No 182708, 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia from European Association of Agricultural Economists

Abstract: The market for organic products increases continuously over time. Because con- sumers are willing to pay a premium for organic goods, firms may have an interest in developing organic production strategies and entering a profitable market segment. The objective of this paper is to assess the profitability of such a strategy and to de- termine how the value added created by the existence of an organic label is shared in a vertical chain among manufacturers and retailers. Using purchase data on the French fluid milk sector, we develop a structural econometric model of demand and supply that takes into account the relative bargaining power between manufacturers and retailers. Our results suggest that the organic label segment is more profitable as it permits the existence of higher margins. Moreover, an organic label allows manu- facturers to achieve more bargaining power relative to retailers and hence to obtain a higher share of total margins.

Keywords: Marketing (search for similar items in EconPapers)
Pages: 13
Date: 2014-08
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://ageconsearch.umn.edu/record/182708/files/B ... ilk_market-381_a.pdf (application/pdf)

Related works:
Working Paper: Organic label and profits sharing in the French fluid milk market (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae14:182708

DOI: 10.22004/ag.econ.182708

Access Statistics for this paper

More papers in 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia from European Association of Agricultural Economists Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().