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Market Power in the European Dairy Industry

Author

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  • Čechura, Lukáš
  • Žáková Kroupová, Zdeňka
  • Hockmann, H.

Abstract

The paper presents an analysis of market power in the output milk-processing market. In particular, the paper identifies market failures in the output milk-processing market in 24 EU member states. The analysis is based on a mark-up model and the application of stochastic frontier methodology. The results show that market failures are pronounced on the EU output milk-processing market. However, the abuse of oligopoly market power is not large on average, despite the fact that we can find significant differences among the countries. The mark-up distribution is skewed toward lower values. That is, the majority of companies are characterized by only a small or almost no degree of market power; however, there are companies (about 10 %) with considerably high oligopoly market power.

Suggested Citation

  • Čechura, Lukáš & Žáková Kroupová, Zdeňka & Hockmann, H., 2015. "Market Power in the European Dairy Industry," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 7(4), pages 1-9, December.
    • Handle: RePEc:ags:aolpei:231891
    DOI: 10.22004/ag.econ.231891
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    References listed on IDEAS

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    3. Daniele Cavicchioli & Luca Cacchiarelli & Alessandro Sorrentino & Roberto Pretolani, 2022. "Should We Cry over the Spilt Milk? Market Power and Structural Change along Dairy Supply Chains in EU Countries," Sustainability, MDPI, vol. 14(8), pages 1-18, April.
    4. Ivo Zdráhal & Věra Bečvářová, 2018. "Entry Into the Common Market of the European Union in Terms of Czech Republic's Foreign Trade with Dairy Products," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 66(2), pages 605-616.
    5. Maximilian Koppenberg & Stefan Hirsch, 2022. "Output market power and firm characteristics in dairy processing: Evidence from three EU countries," Journal of Agricultural Economics, Wiley Blackwell, vol. 73(2), pages 490-517, June.
    6. Nguyen Thi Tuoi & Nguyen Phu Son & Pham Le Thong, 2021. "Estimating the Market Power of Traders in the Arabica Coffee Value Chain in Lam Dong, Vietnam," International Journal of Economics and Financial Research, Academic Research Publishing Group, vol. 7(3), pages 102-108, 09-2021.

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