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Organic label and profits sharing in the French fluid milk market

Label Bio et partage des profits sur le marché du lait liquide en France

Zohra Mechemache () and Céline Bonnet ()
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Céline Bonnet: GREMAQ - Groupe de recherche en économie mathématique et quantitative - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRA - Institut National de la Recherche Agronomique - UT1 - Université Toulouse 1 Capitole

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Abstract: The paper assesses how the value added created by the existence of an organic label in a vertical chain is shared among manufacturers and retailers in the French uid milk market. Using a struc- tural econometric model of consumer substitution patterns and of vertical relationships, we show that organic label leads to a higher bargaining power in favor of manufacturer. Total margins are heterogeneous among products. They are lower for organic brands (37%) compared to conventional ones (52%). On the contrary, rms would bene t more from organic products than for conventional milk while our results suggest the opposite result for retailers.

Keywords: fluid milk market; organic; market power (search for similar items in EconPapers)
Date: 2013-03-21
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Published in 134. EAAE Seminar : Labels on sustainability : an issue for consumers, producers, policy makers, and NGOs, European Association of Agricultural Economists (EAAE). INT.; Institut National de Recherche Agronomique (INRA). UMR UMR INRA / Univ. Grenoble 2 : Economie Appliquée de Grenoble (1215).; Heinrich-Heine-Universität Düsseldorf [Düsseldorf]. DEU., Mar 2013, Paris, France

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Handle: RePEc:hal:journl:hal-02746459