2009, Volume 17, Paper 12
ISSN: 1883-5675

Another Look at Market Power in the Australian Fresh Meat Industries

Kit C. Chung
Garry R. Griffith

Abstract

The issue of market power in the Australian food marketing chain is of continuing and growing concern. Contributing factors include sharply rising retail food prices in recent years together with relatively stable farm prices, and thus increasing marketing margins; high and increasing concentration in the retail food sector, where the two largest supermarket chains account for a large percentage of total national grocery sales; and the legacy of past deregulation of agricultural marketing institutions and trade liberalisation. In this paper an updated quantitative analysis of the competitive behaviour of the marketing chains for beef, lamb, pork and chicken, from farm gate to retail, is reported. A New Empirical Industrial Organisation model is used. Both linear and nonlinear, and single equation and SUR, regression analyses are estimated. As with previous studies, no evidence is found that the marketing chains for the Australian fresh meat industries are non-competitive.

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