Competition in the Swedish Coffee Market

Dick Durevall ()
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Dick Durevall: Department of Economics, School of Economics and Commercial Law, Göteborg University, Postal: Box 640, SE 405 30 GÖTEBORG

No 134, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: It is a widespread belief that multinationals are exploiting their market power in national coffee markets by keeping consumer prices too high and thereby limiting demand for coffee beans. The purpose of this study is to test if this is case in the Swedish market for roasted coffee. In the Swedish market there are a few very large roasting companies and many small ones; a market structure that is typical of many consumer markets for coffee. To analyze the degree of market power, an oligopoly model is estimated using market time series data. The econometric approach is to first test for long-run relationships between the variables with cointegration analysis, and then to estimate a system of equations for demand and pricing behavior. Our major finding is that there is no evidence of market power in the long run, and only some in the short run.

Keywords: Coffee market; Market power; Multinationals; Oligopoly; Sweden (search for similar items in EconPapers)
JEL-codes: L13 L66 L81 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2004-07-13
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Citations: View citations in EconPapers (3)

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