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Empirica

, Volume 39, Issue 1, pp 109–122 | Cite as

Market power in Austrian food retailing: the case of milk products

  • Klaus SalhoferEmail author
  • Christoph Tribl
  • Franz Sinabell
Original Paper

Abstract

An increasing market concentration in food retailing has generated concerns about the market power of retailers towards consumers and input suppliers. This is especially true for countries such as Austria, which has a CR-3 in food retailing greater than 75%. Based on a New Empirical Industrial Organization model we estimate the market power of food retailers towards consumers and input suppliers with respect to three groups of dairy products (drinking milk, cheese, butter including others). Our empirical results suggest that market power of retailing exists towards consumers (in particular in the case of drinking milk) and towards input suppliers (in particular in the case of butter and other milk products). Market power is more significant (in statistical terms) downstream than upstream. However, the impact of oligopsony power on input prices is stronger than the impact of oligopoly power on consumer prices.

Keywords

Market power Oligopoly Oligopsony Retailer Food Milk Austria 

JEL Classification

D21 D43 L13 L66 Q13 

Notes

Acknowledgments

The authors would like to thank Maarten Janssen und Roland Herrmann for valuable comments. Research was carried out as part of the project “Marktspannen und Marktmacht des österreichischen Lebensmitteleinzelhandels am Beispiel Milchprodukte”, financed by the Austrian Ministry of Agriculture, Forestry, Environment and Water Management. Senior authorship is shared among the first two authors.

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Copyright information

© Springer Science+Business Media, LLC. 2011

Authors and Affiliations

  • Klaus Salhofer
    • 1
    Email author
  • Christoph Tribl
    • 2
  • Franz Sinabell
    • 3
  1. 1.Environmental Economics and Agricultural Policy GroupTechnische Universität MünchenFreisingGermany
  2. 2.Federal Institute of Agricultural EconomicsViennaAustria
  3. 3.Austrian Institute of Economic Research (WIFO)ViennaAustria

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