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Abstract
This paper reviews the basic components of antitrust analysis for the supermarket
industry, including definition of product and geographic markets and the measurement
of market power. The analysis of prices and profits in a market structure context
remains important, especially in countries such as Australia with very high supermarket
concentration. Firm and brand level New Empirical Industrial Organisation models
of demand and oligopoly pricing also provide insights for evaluating antitrust
claims. Recent research on vertical pricing games and price transmission expand the
analysis to market channel pricing issues, including coalescing power by supermarkets
and food manufacturers. The issues and approaches explained in this paper are relevant
for policy-orientated research on supermarkets worldwide, including Australia.