Buyer Market Power in UK Food Retailing

Tim A. Lloyd, Steve McCorriston, C. Wyn Morgan and Habtu T. Weldegebriel

No 46007, Working Papers from Scotland's Rural College (formerly Scottish Agricultural College), Land Economy & Environment Research Group

Abstract: The potential existence of buyer market power in UK food retailing has attracted the scrutiny of the UK's anti-trust authorities, culminating in the decision to launch the second of two comprehensive regulatory inquiries in recent years. Throughout, detection of buyer power has been dogged by the paucity of reliable evidence of its existence. In this paper we present a simple theoretical model of oligopsony which delivers quasireduced form retailer-producer pricing equations in which the presence of market power can be detected using readily available market data. Using a cointegrated vector autoregression, we find empirical results that are consistent with the presence of oligopsony power in all six food products investigated.

Keywords: Agribusiness; Consumer/Household Economics (search for similar items in EconPapers)
Pages: 22
Date: 2007-11
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:srlewp:46007

DOI: 10.22004/ag.econ.46007

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