Competition in the Food Marketing Chain

Whether or not the Australian food marketing chain is competitive, or conversely whether market power exists in the chain, has been an issue of concern to farmers and policy makers for most of this century. This concern has been more focussed in recent years due to the dismantling of marketing boards for food products, other aspects of microeconomic reform through the National Competition Policy process, the growing market shares of the major food retailers and the increasing number of merger proposals in the food processing and distribution sectors. The ACCC and National Competition Policy review teams are being required to adjudicate on merger and deregulation proposals respectively, but there is little evidence on the competitive structure of the food marketing chain to guide them in these decisions. In this paper I review some of the theoretical and empirical evidence to see if there are any general guidelines which could be applied to such policy decisions. I also examine the recent report of the Joint Select Committee on the Retailing Sector and the report of the Productivity Commission on the impacts of National Competition Policy on rural and regional Australia. Then I use publicly available data on several food groups to test whether any of these groups show evidence of persistent market power and hence suggest the need for more detailed case studies. The purchasing behaviour of the grains and oilseeds processing sector is found to warrant further attention. Some implications for the profession are then presented including aspects of a possible research agenda and a call for greater attention to the data needed for such analyses.

Issue Date:
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
Total Pages:

 Record created 2017-04-01, last modified 2018-01-22

Download fulltext

Rate this document:

Rate this document:
(Not yet reviewed)