Buyer power in U.K. food retailing: a 'first-pass' test

Habtu Weldegebriel, University of Warwick Abstract The potential existence of buyer power in U.K. food retailing has attracted the scrutiny of the U.K.'s anti-trust authorities, culminating in the second of two comprehensive regulatory inquiries in recent years. Such inquiries are authoritative but correspondingly time-consuming and costly. Moreover, detection of buyer power has been dogged by the paucity of reliable evidence of its existence. In this paper, we present a simple theoretical model of oligopsony which delivers quasi-reduced form retailer-producer pricing equations with which the null of perfect competition can be tested using readily available market data. Using a cointegrated vector autoregression, we find empirical results that show the null of perfect competition can be rejected in seven of the nine food products investigated. Though not conclusive on the existence of buyer power, the proposed test offers a means via which the behaviour of the retail-producer price spread is consistent with it. At the very least, it can corroborate the concerns of the anti-trust authorities as to whether buyer power is potentially one source of concern

Time transfer between the Goddard Optical Research Facility and the U.S. Naval Observatory using 100 picosecond laser pulses

A horizontal two-way time comparison link in air between the University of Maryland laser ranging and time transfer equipment at the Goddard Optical Research Facility (GORF) 1.2 m telescope and the Time Services Division of the U.S. Naval Observatory (USNO) was established. Flat mirrors of 25 cm and 30 cm diameter respectively were placed on top of the Washington Cathedral and on a water tower at the Beltsville Agricultural Research Center. Two optical corner reflectors at the USNO reflect the laser pulses back to the GORF. Light pulses of 100 ps duration and an energy of several hundred microjoules are sent at the rate of 10 pulses per second. The detection at the USNO is by means of an RCA C30902E avalanche photodiode and the timing is accomplished by an HP 5370A computing counter and an HP 1000 computer with respect to a 10 pps pulse train from the Master Clock

Market Power in UK Food Retailing: Theory and Evidence from Seven Product Groups

Establishing the presence of market power in food chains has become an increasingly pertinent line of enquiry given the trend towards increasing concentration that has been observed in many parts of the world. This paper presents a theoretical model of price transmission in vertically related markets under imperfect competition. The model delivers a quasi-reduced form representation that is empirically tractable using readily available market data to test for the presence of market power. In particular, we show that the hypothesis of perfect competition can be rejected if shocks to the demand and supply function are significant and correctly signed in price transmission equations. Using a cointegrated vector autoregression, we find empirical results that are consistent with downstream market power in six out of seven food products investigated, supporting both the findings of the UK competition authority's recent investigation in to supermarkets and renewed calls for further scrutiny of supermarket behaviour by the UK's Office of Trading.imperfect competition, Cointegrated VARs, UK food industry, Marketing, D4, L81,

Contrast medium-induced nephropathy, a more practical approach to prevention?

To The Editor: we read with interest the good review article by Drs Sterner and Nyman [1] concerning the safe use of intravascular contrast medium for both coronary interventions and multi-channel detector computed tomography. see the full text of the articl