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Premium Private Labels, Supply Contracts, Market Segmentation, and Spot Prices

Author

Listed:
  • Bazoche Pascale

    (INRA-LORIA and Laboratoire d’Econométrie de l’Ecole Polytechnique, France)

  • Giraud-Héraud Eric

    (INRA-LORIA and Laboratoire d’Econométrie de l’Ecole Polytechnique, France)

  • Soler Louis-Georges

    (INRA-LORIA. 65 Bd de Brandebourg, 94205, Ivry sur Seine, France)

Abstract

In recent years, European retailers have modified the market segmentation in the meat and the fresh produce sectors by implementing new private labels which aim to guarantee higher quality and food safety. As a result, retailers impose more demanding production requirements and rely on contractual relationships with upstream producers. Meat and vegetables shelve spaces are now composed of generic products supplied from competitive spot markets, and premium private labels based on long term supply contracts. In this paper we propose a model of vertical relationships between producers and retailers in order to analyze the consequences of such strategies. In particular, we analyze the interest of producers to commit to these new private labels, their effects on spot market prices, and the resulting market segmentation between the spot market and supply contracts.

Suggested Citation

  • Bazoche Pascale & Giraud-Héraud Eric & Soler Louis-Georges, 2005. "Premium Private Labels, Supply Contracts, Market Segmentation, and Spot Prices," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 3(1), pages 1-30, February.
    • Handle: RePEc:bpj:bjafio:v:3:y:2005:i:1:n:7
    DOI: 10.2202/1542-0485.1087
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    References listed on IDEAS

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    Cited by:

    1. Caprice, Stéphane & von Schlippenbach, Vanessa & Wey, Christian, 2014. "Supplier Fixed costs and Retail Market Monopolization," TSE Working Papers 14-524, Toulouse School of Economics (TSE).
    2. Sabine Duvaleix & Marie Lassalas & Laure Latruffe & Vasilia Konstantidelli & Irene Tzouramani, 2020. "Adopting Environmentally Friendly Farming Practices and the Role of Quality Labels and Producer Organisations: A Qualitative Analysis Based on Two European Case Studies," Sustainability, MDPI, vol. 12(24), pages 1-16, December.
    3. Irz, Xavier & Mazzocchi, Mario & Réquillart, Vincent & Soler, Louis-Georges, 2015. "Research in Food Economics: past trends and new challenges," Revue d'Etudes en Agriculture et Environnement, Editions NecPlus, vol. 96(01), pages 187-237, March.
    4. Charlier, Christophe & Valceschini, Egizio, 2010. "Food Safety, Market Power and Private Standards: An Analysis of the Emerging Strategies of Food Operators," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 1(2), pages 1-8.
    5. Teresa De Noronha Vaz & Peter Nijkamp, 2009. "Multitasking in the rural world: technological change and sustainability," International Journal of Agricultural Resources, Governance and Ecology, Inderscience Enterprises Ltd, vol. 8(2/3/4), pages 111-129.
    6. Ghasemy Yaghin, R. & Farmani, Zahra, 2023. "Planning a low-carbon, price-differentiated supply chain with scenario-based capacities and eco-friendly customers," International Journal of Production Economics, Elsevier, vol. 265(C).
    7. Dell'Aquila, Crescenzo & Petriccione, Gaetana, 2012. "The EU Fruit and Vegetable Sector in the Post 2013 CAP Scenario," Politica Agricola Internazionale - International Agricultural Policy, Edizioni L'Informatore Agrario, vol. 2012(1), pages 1-16, August.
    8. ter Braak, Anne & Geyskens, Inge & Dekimpe, Marnik G., 2014. "Taking private labels upmarket: Empirical generalizations on category drivers of premium private label introductions," Journal of Retailing, Elsevier, vol. 90(2), pages 125-140.
    9. Thomas, Alban & Lamine, Claire & Allès, Benjamin & Chiffoleau, Yuna & Doré, Antoine & Dubuisson-Quellier, Sophie & Hannachi, Mourad, 2020. "The key roles of economic and social organization, producer and consumer behaviour towards a HAFEN (Health-Agriculture-Environment-Food Nexus)," TSE Working Papers 20-1068, Toulouse School of Economics (TSE).
    10. Giraud-Heraud, Eric & Grazia, Cristina & Hammoudi, Abdelhakim, 2007. "Agrifood safety standards, market power and consumer misperceptions," 105th Seminar, March 8-10, 2007, Bologna, Italy 7849, European Association of Agricultural Economists.
    11. Vanessa von Schlippenbach & Isabel Teichmann, 2012. "The Strategic Use of Private Quality Standards in Food Supply Chains," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(5), pages 1189-1201.
    12. Rojas Christian & Lavoie Nathalie & Wang Shinn-Shyr, 2012. "Buyer Power and Vertically Differentiated Retailers," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 10(1), pages 1-28, July.
    13. Daniel Hassan & Sylvette Monier-Dilhan, 2009. "Mesure des changements de consommation suite à une segmentation de l’offre : l’exemple de la tomate fraîche," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 90(3), pages 309-326.
    14. Venturini, Luciano, 2006. "Vertical competition between manufacturers and retailers and upstream incentives to innovate and differentiate," 98th Seminar, June 29-July 2, 2006, Chania, Crete, Greece 10050, European Association of Agricultural Economists.
    15. Combris, Pierre & Pinto, Alexandra Seabra & Fragata, Antonio & Giraud-Heraud, Eric, 2007. "Does taste beat food safety? Evidence from the "Pera Rocha" case in Portugal," 105th Seminar, March 8-10, 2007, Bologna, Italy 7879, European Association of Agricultural Economists.
    16. Eric Giraud-Héraud & Hakim Hammoudi & Louis-Georges Soler, 2006. "Food Safety, Liability and Collective Norms," Working Papers hal-00243034, HAL.
    17. Sun, Shaoyan & An, Henry & Marcoul, Philippe Andre, 2018. "Retailers' private labels strategy under the weather effect," 2018 Annual Meeting, August 5-7, Washington, D.C. 273820, Agricultural and Applied Economics Association.

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