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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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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Working Paper: Organic label and profits sharing in the French fluid milk market (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02746459

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