Imperfect competition in the fresh tomato industry

In this paper, we analyse the market power of the retail industry in the French tomato market. Following the methods developed in the New Empirical Industrial Organization, we develop a structural model of this industry. The analysis is based on detailed data on final consumption and prices at both shipper and consumer levels for two types of tomatoes in France. The structural model is composed of a system of demand equations, supply equations and pricing equations which include terms which capture the oligopoly and oligopsony power of the retail sector. We show that i) elasticity of demand varies during the year ii) the retail sector exercise only a ‘moderate’ market power iii) the exercise of market power decreases over time iv) If markets were competitive, in the case of tomato ‘ronde’ retail price would decrease by about 1.2% to 4.5% depending on the year; v) In absence of market power, shipping price might be 6% to 24% higher than observed. We find higher distortions in the case of tomato ‘grappe’. We also find that the distortions tend to decrease over time. We conclude to a moderate exercise of market power of the retail sector in the French tomato market.Oligopoly, Oligopsony, Fresh products, Industrial Organization,

Imperfect Competition in the Fresh Fruit and Vegetable Industry

Do retailers exert market power in the fresh fruit and vegetables markets? In the EU countries, as the retail industry distributes a significant part of fruit and vegetables, a non competitive behavior might have significant impact on consumption, on surplus and welfare. In this paper, we shed some light on the degree of non-competitive distortions in the French fresh fruit and vegetable markets. We analyze the market of tomato. The analysis is based on aggregate data on final consumption and prices at both shipper and consumer levels in France. The structural model is composed of a system of demand equations, supply equations and pricing equations which include terms that capture the oligopoly and oligopsony power of the retail sector and that account for product differentiation. We show that: i) elasticity of demand varies during the year ii) the exercise of market power decreases over time iii) if markets were competitive, retail price would decrease by about 2% to 12% depending on the year while shipping price might be 10% to 54% higher than observed. As a general result quantities consumed would not change significantly. We conclude that the retail sector exerts a moderate market power.Oligopsony, oligopoly, retail industry, fruit and vegetable markets., Agricultural and Food Policy,

Imperfect Competition in the Fresh Tomato Industry

In this paper, we develop a structural model to analyze the market power of the retail industry in the French fresh tomato market. The analysis is based on aggregate data on \u85nal consumption and prices at both shipper and consumer levels for the two main varieties of tomatoes in France. The structural model is composed of a system of demand equations, supply equations and pricing equations which include terms that capture the oligopoly and oligopsony power of the retail sector and that account for product di¤erentiation. We show that: i) elasticity of demand varies during the year ii) the retail sector exercises only "moderate " market power iii) the exercise of market power decreases over time iv) if markets were competitive, in the case of the "grappe " tomato, retail price would decrease by about 2 % to 12% depending on the year; v) in absence of market power, shipping price might be 10% to 54 % higher than observed. In summary, given that distortions are smaller in the case of the "ronde " tomato, we conclude that there is a moderate exercise of market power by the retail sector in the French tomato market

Imperfect competition in the fresh tomato industry

In this paper, we analyse the market power of the retail industry in the French tomato market. Following the methods developed in the New Empirical Industrial Organization, we develop a structural model of this industry. The analysis is based on detailed data on final consumption and prices at both shipper and consumer levels for two types of tomatoes in France. The structural model is composed of a system of demand equations, supply equations and pricing equations which include terms which capture the oligopoly and oligopsony power of the retail sector. We show that i) elasticity of demand varies during the year ii) the retail sector exercise only a ‘moderate’ market power iii) the exercise of market power decreases over time iv) If markets were competitive, in the case of tomato ‘ronde’ retail price would decrease by about 1.2% to 4.5% depending on the year; v) In absence of market power, shipping price might be 6% to 24% higher than observed. We find higher distortions in the case of tomato ‘grappe’. We also find that the distortions tend to decrease over time. We conclude to a moderate exercise of market power of the retail sector in the French tomato market

Imperfect Competition in the Fresh Fruit and Vegetable Industry

Do retailers exert market power in the fresh fruit and vegetables markets? In the EU countries, as the retail industry distributes a significant part of fruit and vegetables, a non competitive behavior might have significant impact on consumption, on surplus and welfare. In this paper, we shed some light on the degree of non-competitive distortions in the French fresh fruit and vegetable markets. We analyze the market of tomato. The analysis is based on aggregate data on final consumption and prices at both shipper and consumer levels in France. The structural model is composed of a system of demand equations, supply equations and pricing equations which include terms that capture the oligopoly and oligopsony power of the retail sector and that account for product differentiation. We show that: i) elasticity of demand varies during the year ii) the exercise of market power decreases over time iii) if markets were competitive, retail price would decrease by about 2% to 12% depending on the year while shipping price might be 10% to 54% higher than observed. As a general result quantities consumed would not change significantly. We conclude that the retail sector exerts a moderate market power