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Abstract

The presence and behavior of private labels add a significant dimension to price competition among the food system's subsectors. Recent surveys in two college towns in Texas show a larger price difference between national brands and private labels than previous studies. The increase in price differences are attributed to "horizontal" and "vertical" influences on prices and also to advertising and the proliferation of brands. This competitive process gives the consumer the advantage of new products and products with brand appeal (national brands) as well as low cost copies (private labels) of these successful products.

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