The dark side of coffee. Price war in the German market for roasted coffee

Germany is the second largest coffee market in the world, just overshadowed by the United States. Coffee is the most popular beverage in Germany – in fact more popular than beer. In 1999 the five biggest companies in the raosted coffee market had a combined market share of 84.5%. The market is characterized by fierce competition which continues to squeeze the earnings of the German coffee roasters. The degree of competition was expected to increase even more as a result of a merger in 1997. This paper examines the pricing behavior in the German market for roasted coffee. The second question is whether the degree of competition has changed due to changes in market structure and changes in demand. Changes in market structure are the merger of Tchibo and Eduscho in 1997. Changes in demand are cyclical demand fluctuations - every year before Easter and Christmas. Empirical results are derived using data on the aggregate market for roasted coffee in Germany during 1992:1 to 2000:12 and indicate that the market is suffering on not only a severe price competition, but on price war. --Market for roasted coffee ; Germany ; conjectural variation ; market power ; simultaneous equation system ; GMM

The Dark Side of Coffee Market Power in the German Market for Roasted Coffee

Germany is the second important coffee market in the world, just overshadowed by the United States. Coffee is the most famous beverage in Germany - even more popular than beer. On the supply side dominate few roasters. Market structure influences the market outcome and explains the processors' ability to exercise market power. This paper aims at studying the pricing behavior in the German market for roasted coffee. Respectively, it discusses the impact of three different explanations. First, market power may be due to low price elasticity related to a high level of consumption. Second, pricing behavior may be influenced by the industry concentration. And finally, pricing behavior may be change over time due to exogenous shocks. In particular, the degree of competition has changed as a consequences of a merger. Further, cyclical demand changes induce pricing behavior. Empirical results are derived using data on the aggregate market for roasted coffee in Germany during 1992:1 to 2000:12.Market for roasted coffee, Germany, elasticity of conjectural variation, market power, simultaneous equation system, GMM, Industrial Organization,

Do retail coffee prices increase faster than they fall? Asymmetric price transmission in France, Germany and the United States

This investigation examines price transmission asymmetries (PTA) between international and retail coffee prices in the US, France and Germany. Differences in price transmission mechanisms provide evidence for disparities in market structure and market performance across countries. Although all processors of roasted coffee purchase green coffee at the same price in the international markets, one finds significant differences in retail prices among these countries. The study develops an Error Correction (EC) representation model to assess PTA of non-stationary models. Finally, it claims that identifying differences in price transmission asymmetry is an approach to compare market structure across countries.coffee, markets, Food Consumption/Nutrition/Food Safety, Marketing,

The dark side of coffee. Price war in the German market for roasted coffee

Germany is the second largest coffee market in the world, just overshadowed by the United States. Coffee is the most popular beverage in Germany - in fact more popular than beer. In 1999 the five biggest companies in the raosted coffee market had a combined market share of 84.5%. The market is characterized by fierce competition which continues to squeeze the earnings of the German coffee roasters. The degree of competition was expected to increase even more as a result of a merger in 1997. This paper examines the pricing behavior in the German market for roasted coffee. The second question is whether the degree of competition has changed due to changes in market structure and changes in demand. Changes in market structure are the merger of Tchibo and Eduscho in 1997. Changes in demand are cyclical demand fluctuations - every year before Easter and Christmas. Empirical results are derived using data on the aggregate market for roasted coffee in Germany during 1992:1 to 2000:12 and indicate that the market is suffering on not only a severe price competition, but on price war

The dark side of coffee: Price war in the German market for roasted coffee

Germany is the second largest coffee market in the world, just overshadowed by the United States. Coffee is the most popular beverage in Germany – in fact more popular than beer. In 1999 the five biggest companies in the raosted coffee market had a combined market share of 84.5%. The market is characterized by fierce competition which continues to squeeze the earnings of the German coffee roasters. The degree of competition was expected to increase even more as a esult of a merger in 1997. This paper examines the pricing behavior in the German market for roasted coffee. The second question is whether the degree of competition has changed due to changes in market structure and changes in demand. Changes in market structure are the merger of Tchibo and Eduscho in 1997. Changes in demand are cyclical demand fluctuations - every year before Easter and Christmas. Empirical results are derived using data on the aggregate market for roasted coffee in Germany during 1992:1 to 2000:12 and indicate that the market is suffering on not only a severe price competition, but on price war

Die Zyklik der Profite in der Ernährungswirtschaft: Ein internationaler Vergleich.

Im Rahmen des Struktur-Verhaltens-Ergebnis-Ansatz analysiert der vorliegende Aufsatz die Determinanten und die Zyklik der Profite verschiedener Branchen der Ernährungswirtschaft in Deutschland, den USA sowie den Niederlanden. Aus der Schwankung der Profite im Zeitablauf lassen sich, bei gegebener Marktstruktur, Hinweise auf die Intensität des Wettbewerbs und damit das Verhalten der Unternehmen gewinnen. Die Ergebnisse der ökonometrischen Panelanalyse zeigen ausgeprägte prozyklische Schwankungen der Profite in Deutschland in hochkonzentrierten Branchen, während das Ausmaß der Schwankungen in Branchen mit niedriger Konzentration in Deutschland sowie in sämtlichen Branchen der USA gering ist. Die Beobachtungen für Deutschland deuten auf eine Zunahme der Wettbewerbsintensität in einer Rezession hin. Die Schätzung ökonometrischer Modelle für die Niederlande führt zu unbefriedigenden Ergebnissen.Based upon the structure-conduct-performance-approach the present paper analyses determinants of price-cost-margins over the business cycle for food industries in Germany, the USA as well as the Netherlands. Controlling for market structure variables, cyclical fluctuations in profitability are interpreted as evidence for changes in firm behaviour. The econometric panel data models reveal procyclic fluctuations of profits in highly concentrated industries in Germany. In contrast, profitability in competitive industries in Germany as well as in all US-food industries are found to be more stable over the business cycle. This observation is explicable in terms of a more aggressive behaviour of firms in boom periods. The econometric model does not adequately explain industry differences in profitability in the Netherlands

Die Zyklik der Profite in der Ernährungswirtschaft: Ein internationaler Vergleich.

Im Rahmen des Struktur-Verhaltens-Ergebnis-Ansatz analysiert der vorliegende Aufsatz die Determinanten und die Zyklik der Profite verschiedener Branchen der Ernährungswirtschaft in Deutschland, den USA sowie den Niederlanden. Aus der Schwankung der Profite im Zeitablauf lassen sich, bei gegebener Marktstruktur, Hinweise auf die Intensität des Wettbewerbs und damit das Verhalten der Unternehmen gewinnen. Die Ergebnisse der ökonometrischen Panelanalyse zeigen ausgeprägte prozyklische Schwankungen der Profite in Deutschland in hochkonzentrierten Branchen, während das Ausmaß der Schwankungen in Branchen mit niedriger Konzentration in Deutschland sowie in sämtlichen Branchen der USA gering ist. Die Beobachtungen für Deutschland deuten auf eine Zunahme der Wettbewerbsintensität in einer Rezession hin. Die Schätzung ökonometrischer Modelle für die Niederlande führt zu unbefriedigenden Ergebnissen. -- Based upon the structure-conduct-performance-approach the present paper analyses determinants of price-cost-margins over the business cycle for food industries in Germany, the USA as well as the Netherlands. Controlling for market structure variables, cyclical fluctuations in profitability are interpreted as evidence for changes in firm behaviour. The econometric panel data models reveal procyclic fluctuations of profits in highly concentrated industries in Germany. In contrast, profitability in competitive industries in Germany as well as in all US-food industries are found to be more stable over the business cycle. This observation is explicable in terms of a more aggressive behaviour of firms in boom periods. The econometric model does not adequately explain industry differences in profitability in the Netherlands.Struktur-Verhalts-Ergebnis-Ansatz,LERNER-Index,Ernährungswirtschaft,Panelanalyse,Deutschland,Niederlande,structure-conduct-performance-approach,LERNER-index,food industries,panel data,Germany,Netherlands,USA

Searching in Lists While Driving

More and more in-vehicle systems are rapidly becoming commercially available, making the driving task more and more complex. Driving performance in such multiple-task situations depends primarily on the level of task demands imposed on the driver by certain situations. The higher the perceived task difficulty, the higher the workload level of that individual. The aim of this dissertation was therefore to investigate possible trade-offs between primary task (driving) and secondary task (searching in a list) performance in a simulated driving environment. For this purpose, the effects of a standardized secondary visual search task on the primary task of driving were evaluated and compared between several conditions. Even though there was a clear tendency to protect the primary task of driving, participants seemed incapable of fully prioritising the primary task of driving over the secondary search task at all times

Die Zyklik der Profite in der Ernährungswirtschaft: Ein internationaler Vergleich

Im Rahmen des Struktur-Verhaltens-Ergebnis-Ansatz analysiert der vorliegende Aufsatz die Determinanten und die Zyklik der Profite verschiedener Branchen der Ernährungswirtschaft in Deutschland, den USA sowie den Niederlanden. Aus der Schwankung der Profite im Zeitablauf lassen sich, bei gegebener Marktstruktur, Hinweise auf die Intensität des Wettbewerbs und damit das Verhalten der Unternehmen gewinnen. Die Ergebnisse der ökonometrischen Panelanalyse zeigen ausgeprägte prozyklische Schwankungen der Profite in Deutschland in hochkonzentrierten Branchen, während das Ausmaß der Schwankungen in Branchen mit niedriger Konzentration in Deutschland sowie in sämtlichen Branchen der USA gering ist. Die Beobachtungen für Deutschland deuten auf eine Zunahme der Wettbewerbsintensität in einer Rezession hin. Die Schätzung ökonometrischer Modelle für die Niederlande führt zu unbefriedigenden Ergebnissen.Based upon the structure-conduct-performance-approach the present paper analyses determinants of price-cost-margins over the business cycle for food industries in Germany, the USA as well as the Netherlands. Controlling for market structure variables, cyclical fluctuations in profitability are interpreted as evidence for changes in firm behaviour. The econometric panel data models reveal procyclic fluctuations of profits in highly concentrated industries in Germany. In contrast, profitability in competitive industries in Germany as well as in all US-food industries are found to be more stable over the business cycle. This observation is explicable in terms of a more aggressive behaviour of firms in boom periods. The econometric model does not adequately explain industry differences in profitability in the Netherlands