Redistribution, state trading enterprises and ‘politically optimal’ tariffs

This is the author accepted manuscript. The final version is available from Wiley via the DOI in this record.State trading enterprises (STEs) are widely used and can be viewed as instruments of trade policy. We analyse two aspects: the first is their potential trade distorting effect; the second is how they modify the case for the ‘politically optimal’ tariff. We show that the STE can reduce the need for a tariff designed for domestic redistribution. This result introduces some ambiguity about how STEs are interpreted: from a multilateralist perspective, they should be dealt with in the same way as other non-tariff barriers; from a nationalistic perspective, they can reduce the need for ‘politically optimal.’ State trading enterprises (STEs) are widely used and can be viewed as instruments of trade policy. We analyse two aspects: the first is their potential trade distorting effect; the second is how they modify the case for the ‘politically optimal’ tariff. We show that the STE can reduce the need for a tariff designed for domestic redistribution. This result introduces some ambiguity about how STEs are interpreted: from a multilateralist perspective, they should be dealt with in the same way as other non-tariff barriers; from a nationalistic perspective, they can reduce the need for ‘politically optimal.

Dynamics of Food Price Inflation Across the EU

Against the backdrop of recent price spikes on world commodity markets, retail food inflation has varied considerably across EU Member States despite the existence of a range of common policies and, for some Member States, a common currency. In this paper, we investigate the extent and potential causes of the differences in the experience of food inflation through the lens of a single well-defined product chain in 11 EU Member States. Using a structural VAR framework, we find that the contribution of world prices to the behaviour of retail bread prices shows significant differences across the EU Member States we cover. Differences in the functioning of the food sector (particularly barriers to competition and vertical control) appear to be correlated with the role played world prices, highlighting the importance of such structural features in commodity price transmission

Price transmission at the micro-level: what accounts for the heterogeneity?

We use high-frequency scanner data to estimate product-specific price transmission elasticities across product types, between national brands and private labels and across retail chains in the UK. The results provide new insights into the determinants of price transmission including the role of vertical control in the retail chain, the elasticity of retail mark-ups and retailer market power. Using data on 106 orange juice products over 130 weeks for 7 UK retail chains, we highlight significant variation in price transmission by chain and that the characteristics of pricing behaviour and differences in vertical control across are important determinants of price transmission

The Experience of Food Inflation Across the EU. (Transparency of Food Pricing (TRANSFOP) Working Paper 5)

The background to the TRANSFOP research project can be traced to the global commodity price surge of 2007 and 2008 with world prices of many agricultural and energy commodities rising, in nominal terms, to record levels. Although world prices fell back in 2009, by 2011, world commodity prices again rose and exceeded the peak levels recorded in 2008. The domestic impact of these events on global markets was reflected in higher levels of food price inflation though, despite the apparently ‘common’ nature of the global shocks, the effect on domestic food price inflation varied markedly across countries. This was perhaps most noticeable in the experience of many developing countries and certainly when contrasting the experience of emerging and developing economies with advanced economies. The general reasons for this broad experience can readily focus on the use of government policies via domestic intervention, the use of safety nets and changes in border measures (FAO, 2009). However, the experience of food price inflation has varied considerably across advanced economies and is also apparent among EU countries. Accounting for this poses significant challenges: given the existence of common trade and agricultural policies across the EU and the existence of the ‘single market’, why should the food inflation experience vary across EU countries? Identifying the factors that potentially determine the links between what happens on world markets and the resulting effect on domestic retail food prices is a key overall aim of the TRANSFOP project

Do Sales Matter: Evidence from UK Food Retailing. (Discussion Papers in Economics, No.11/01)

This paper assesses the role of sales as a feature of price dynamics using scanner data. The study analyses an extensive, high fre quency panel of supermarket prices consisting of over 230,000 weekly price observations on around 500 products in 15 categories of food stocked by the UK’s seven largest retail chains. In all, 1,700 weekly time series are available at the barcode - specific level including branded and own - label products. The data allow s the frequency, magnitude and duration of sales to be analysed in greater detail than has hitherto been possible with UK data. The main results are: ( i) sales are a key feature of aggregate pri ce variation with around 40 per cent of price variation being accounted for by sales once price differences for each U nique P roduct C ode (UPC) level across the major retailers are accounted for; (ii) there is considerable heterogeneity in the use of sales across retailers; (iii) much of the price variation that is observed in the UK food retailing sector is accounted for by price dif ferences between retailers; (iv ) only a small proportion of price variation that is observed in UK food retailing is common ac ross the major retailers suggesting that cost shocks originating at the manufacturing level is not one of the main sources of price variation in the UK; ( v) own - label products also exhibit considerable sales behaviour though this is less important than sal es for branded goods; and (v i ) there is some evidence of coordination in the timing of sales across retailers insofar as the probability of a sale at the UPC level at a given retailer increases if the product is also on sale at another retailer

Retailer Heterogeneity and Price Dynamics: Scanner Data (Transparency of Food Pricing (TRANSFOP) Working Paper 8)

This paper contributes to recent research on price dynamics using micro-price data sets. We emphasize a previously neglected aspect, the role of retailer heterogeneity. Our key findings are: (i) the frequency of price adjustment and the implied duration of prices varies considerably across retailers; (ii) price promotions (sales) also vary across retailers with some retailers seldom using sales, while for others sales are a common feature of pricing; (iii) the duration of reference prices is-at most-26 weeks but the duration of reference prices is around 16 weeks for some retailers; (iv) branded products have shorter durations than private label products; (v) decomposition analysis suggests price adjustment is evenly split between sales and reference prices but, for some retailers, reference prices are the main source of price changes; (vi) there is low correlation between the frequency of price and costs changes across both products and retailers. Taken together, while confirming the significance of price stickiness after accounting for sales, price dynamics vary considerably across retailers. In turn, retailer heterogeneity has important implications for interpreting aggregate price dynamics in both theoretical and empirical research

Retail Price Dynamics and Retailer Heterogeneity: UK Evidence

We examine retailer heterogeneity in price adjustment in UK supermarkets. Considerable variation in the price change frequency of identically bar-coded products among retail chains is found. Decomposition analysis suggests that price adjustment is evenly split between sales and reference prices with substantive variation across retailers

Explaining UK Food Price Inflation. (Transparency of Food Pricing (TRANSFOP) Working Paper 1)

Retail food price inflation in the UK peaked at nearly 14% in the summer of 2008, a level much higher than had been seen in the previous 10 years and, since then, food price inflation has continued to lead general inflation. An obvious factor driving domestic retail food prices is world commodity prices, but other factors matter too. In this paper, we model UK food price inflation and explore a range of potential drivers including world food prices, exchange rates, manufacturing costs, oil prices and wages. Over the period 1990-2010, we show that the major drivers of UK food price inflation are world raw food prices and the exchange rate; less important are manufacturing costs, unemployment and earnings. Oil prices matter too but indirectly via their effect on world agricultural commodity prices. We also show that the effect on domestic retail food price inflation depends on the duration of the shocks arising on world commodity markets

CV19017

This report provides the results of the seventh underwater television on the ‘Porcupine Bank Nephrops grounds’ ICES assessment area; Functional Unit 16. The survey was multi-disciplinary in nature collecting UWTV, CTD and other ecosystem data. In total 65 UWTV stations were successfully completed in a randomised 6 nautical mile isometric grid covering the full spatial extent of the stock. The mean burrow density observed in 2019, adjusted for edge effect, was 0.14 burrows/m². The final krigged abundance estimate was 1010 million burrows with a relative standard error of 5% and an estimated stock area of 7,130 km2. The 2019 abundance estimate was 9.5% lower than in 2018. Using the 2019 estimate of abundance and updated stock data implies catches between 2127 and 2637 tonnes in 2020 that correspond to the F ranges in the EU multi annual plan for Western Waters (assuming that all catch is landed). Four species of sea-pen; Virgularia mirabilis, Funiculina quadrangularis, Pennatula phosphorea and the deepwater sea-pen Kophobelemnon stelliferum were observed during the survey. Trawl marks were also observed on 31% of the stations surveyed