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Market Power Absent Merger Review: Brewing in Perú

Author

Listed:
  • Ariel A. Casarin

    (Universidad Adolfo Ibáñez)

  • Magdalena Cornejo

    (Universidad Torcuato Di Tella)

  • María Eugenia Delfino

    (Universidad de los Andes)

Abstract

We examine the extent of market power in the brewing market of Perú, where the absence of preventive merger review eased consolidation into a single industrial brewer. We use a standard oligopoly model and exploit both seasonality in demand and atypically large and frequent variations in the structure and level of excise taxes to identify variations in market power. Our results provide evidence of the ineffectiveness of competition policy as uncontested mergers resulted in a degree of market power that decreased only with the entry of new firms.

Suggested Citation

  • Ariel A. Casarin & Magdalena Cornejo & María Eugenia Delfino, 2020. "Market Power Absent Merger Review: Brewing in Perú," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 56(3), pages 535-556, May.
    • Handle: RePEc:kap:revind:v:56:y:2020:i:3:d:10.1007_s11151-019-09703-8
    DOI: 10.1007/s11151-019-09703-8
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    2. Dai, Jiawa & Feng, Yuchen & Wang, Ziuqing & Yuan, Guang, 2021. "Does higher market power necessarily reduce efficiency? Evidence from Chinese rice processing enterprises," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 24(1).

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    More about this item

    Keywords

    Antitrust; Merger review; Market power; Brewing industry;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco

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