Do the EU food processors abuse Oligopsony market power?

The paper identifies the degree of market imperfections in the input processing market and provides a comparative analysis among the different EU countries and different industries. For detection of the abuse of oligopsonistic/monopsonistic behavior a mark down model using stochastic frontier methodology was derived. The results show that the input food processing market is characterized by some degree of non-competitive behavior in all analysed sectors - slaughtering, fruits and vegetables, dairy and milling. However, the degree of market imperfections differs among the sectors as well as within individual sectors. In particular, the EU slaughtering common market is characterised by considerably greater market imperfections as compared to the dairy and milling sectors. Moreover, significant differences among EU member countries in individual countries were revealed by the estimate in all analysed sectors. In particularly, some companies are characterized by significant oligopsony market power.

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Conference Paper/ Presentation
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JEL Codes:
D22; D43; L13

 Record created 2017-04-01, last modified 2018-01-23

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