Ronald W. Cotterill (email: firstname.lastname@example.org) is Professor of Agricultural and Resource Economics and Director of the Food Marketing Policy Center at the University of Connecticut, CT, USA.
Antitrust analysis of supermarkets: global concerns playing out in local markets
Article first published online: 21 APR 2006
Australian Journal of Agricultural and Resource Economics
Volume 50, Issue 1, pages 17–32, March 2006
How to Cite
Cotterill, R. W. (2006), Antitrust analysis of supermarkets: global concerns playing out in local markets. Australian Journal of Agricultural and Resource Economics, 50: 17–32. doi: 10.1111/j.1467-8489.2006.00322.x
- Issue published online: 21 APR 2006
- Article first published online: 21 APR 2006
- market concentration;
- market definition;
- Nash–Bertrand conduct;
- price–cost margin;
- price transmission rate;
- unilateral and coordinated market power
This paper reviews the basic components of antitrust analysis for the supermarket industry, including definition of product and geographic markets and the measurement of market power. The analysis of prices and profits in a market structure context remains important, especially in countries such as Australia with very high supermarket concentration. Firm and brand level New Empirical Industrial Organisation models of demand and oligopoly pricing also provide insights for evaluating antitrust claims. Recent research on vertical pricing games and price transmission expand the analysis to market channel pricing issues, including coalescing power by supermarkets and food manufacturers. The issues and approaches explained in this paper are relevant for policy-orientated research on supermarkets worldwide, including Australia.