Analysis of Price and Product Competition from Imports in the Preserved Mushrooms Market in Australia

The Australian preserved mushrooms industry is one of a number of industries in the horticultural sector that is under threat from cheaper imported products. The Australian Customs Service is currently investigating the alleged dumping of Chinese imported cans of preserved mushrooms that feature prominently on supermarket shelves. Evidence exists that cheaper imported Chinese products have incurred injury in the Australian market. These Chinese imports have penetrated the Australian preserved mushroom industry and compete intensely on price, although the one remaining domestic producer in the Australian market claims stronger brand loyalty. However, it is possible that concentration on price competition might lead to a neglect of more damaging long-term product competition from these imports. We highlight the nature and extent of this competition by identifying demand, price and expenditure relationships between local and imported preserved mushrooms. Of four propositions tested in the analysis, two were supported but results of the other two tests were contrary to expectations. It was expected that the Australian producer competed more on brand recognition than price but evidence suggests otherwise. Also, it was expected that consumers would prefer a domestic ‘lite’ product over other domestic products with greater health-consciousness among consumers as incomes increase. Yet, while this product has the highest expenditure elasticity of demand among domestic products, it did not command a significantly higher proportion of sales with an increase in the budget for preserved mushrooms. On the other hand, the proposition was tested that consumers show greater preference for products in brine with an increase in the budget for preserved mushrooms on the premise that these products are more versatile and attractive to a younger and richer cohort of shoppers buying the products. Evidence supports this proposition and thus an advantage lies with the Chinese producers who supply mushrooms using the brine-preserving medium. Finally, significant and positive cross-price elasticities of demand were confirmed between domestic and imported brands, suggesting that Chinese imports do compete with domestic products on price.


Issue Date:
2006
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/139893
Total Pages:
20




 Record created 2017-04-01, last modified 2017-08-26

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