In recent years, there has been significant consolidation and concentration in food retail distribution in the European Union, as our paper documents. We examine the implications of this from the social welfare viewpoint. Our focus is on buyer power, since a commonly held view is that, arising from increased concentration, it may be a buffer to significant manufacturer power. We investigate the issue both theoretically and through data and case study work. We suggest the market will develop into a concentrated pattern across Europe, but that the eventual impact on consumers will depend significantly on the nature and form of competition between large retail chains and how well buying groups ensure that even the smaller retailers can compete on an effective basis.
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Dobson, P.W., Clarke, R., Davies, S. et al. Buyer Power and its Impact on Competition in the Food Retail Distribution Sector of the European Union. Journal of Industry, Competition and Trade 1, 247–281 (2001). https://doi.org/10.1023/A:1015268420311
- buyer power