IDEAS home Printed from https://ideas.repec.org/a/wly/apecpp/v44y2022i3p1327-1339.html
   My bibliography  Save this article

Foaming up a milk empire? Projected effects of a dairy merger

Author

Listed:
  • Syed Badruddoza
  • Jill J. McCluskey
  • Andrea C. Carlson

Abstract

The recent bankruptcy of Dean Foods (DF) and subsequent acquisition of a major share by Dairy Farmers of America (DFA) raised an antitrust complaint which led to DF divesting some assets. The current article empirically analyzes the economic impact of a hypothetical merger between DF and DFA. We use retail scanner data of 2008–2018 under a random‐coefficient discrete choice framework. Assuming a constant marginal cost, we find that the merger may slightly increase retail prices of cow milk products‐‐especially organic ones‐‐across the market and the hypothetical market power of DFA in the long run.

Suggested Citation

  • Syed Badruddoza & Jill J. McCluskey & Andrea C. Carlson, 2022. "Foaming up a milk empire? Projected effects of a dairy merger," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(3), pages 1327-1339, September.
    • Handle: RePEc:wly:apecpp:v:44:y:2022:i:3:p:1327-1339
    DOI: 10.1002/aepp.13207
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/aepp.13207
    Download Restriction: no
    File URL: https://libkey.io/10.1002/aepp.13207?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Michael F. Sproul, 2009. "Antitrust and Prices," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 2, pages 84-95, April.
    2. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555, September.
    3. MacDonald, James & Newton, Doris, 2014. "Milk Production Continues Shifting to Large-Scale Farms," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, issue 11, pages 1-1, December.
    4. Robert W. Crandall & Clifford Winston, 2005. "Does antitrust policy improve consumer welfare? Assessing the evidence," Chapters, in: Colin Robinson (ed.), Governments, Competition and Utility Regulation, chapter 2, Edward Elgar Publishing.
    5. Stewart, Hayden & Dong, Diansheng & Carlson, Andrea, 2013. "Why Are Americans Consuming Less Fluid Milk? A Look at Generational Differences in Intake Frequency," Economic Research Report 262223, United States Department of Agriculture, Economic Research Service.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Connor, John M. & Bolotova, Yuliya, 2006. "Cartel overcharges: Survey and meta-analysis," International Journal of Industrial Organization, Elsevier, vol. 24(6), pages 1109-1137, November.
    2. Paolo Buccirossi & Lorenzo Ciari & Tomaso Duso & Giancarlo Spagnolo & Cristiana Vitale, 2013. "Competition Policy and Productivity Growth: An Empirical Assessment," The Review of Economics and Statistics, MIT Press, vol. 95(4), pages 1324-1336, October.
    3. Babina, Tania & Barkai, Simcha & Jeffers, Jessica & Karger, Ezra & Volkova, Ekaterina, 2023. "Antitrust Enforcement Increases Economic Activity," HEC Research Papers Series 1488, HEC Paris.
    4. Henry Ergas, 2008. "Should Australia Encourage Developing Countries to Adopt Competition Laws?," Macroeconomics Working Papers 22307, East Asian Bureau of Economic Research.
    5. Kalyn Coatney & Jesse Tack, 2014. "The Impacts of an Antitrust Investigation: A Case Study in Agriculture," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 44(4), pages 423-441, June.
    6. Orley Ashenfelter & Daniel Hosken, 2008. "The Effect of Mergers on Consumer Prices: Evidence from Five Selected Case Studies," NBER Working Papers 13859, National Bureau of Economic Research, Inc.
    7. Stefania Grezzana, 2016. "Lost In Time And Space: The Deterrence Effect Of Cartel Busts On The Retail Gasoline Market," Anais do XLIII Encontro Nacional de Economia [Proceedings of the 43rd Brazilian Economics Meeting] 158, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    8. Mats Bergman, 2008. "Quis Custodiet Ipsos Custodes? or Measuring and Evaluating the Effectiveness of Competition Enforcement," De Economist, Springer, vol. 156(4), pages 387-409, December.
    9. Orley Ashenfelter & Daniel Hosken, 2008. "The Effect of Mergers on Consumer Prices: Evidence from Five Selected Case Studies," NBER Working Papers 13859, National Bureau of Economic Research, Inc.
    10. John Connor, 2006. "Effectiveness of Antitrust Sanctions on Modern International Cartels," Journal of Industry, Competition and Trade, Springer, vol. 6(3), pages 195-223, December.
    11. Günster, Andrea & van Dijk, Mathijs, 2016. "The impact of European antitrust policy: Evidence from the stock market," International Review of Law and Economics, Elsevier, vol. 46(C), pages 20-33.
    12. Brito, Duarte & Pereira, Pedro & Ramalho, Joaquim J.S., 2013. "Mergers, coordinated effects and efficiency in the Portuguese non-life insurance industry," International Journal of Industrial Organization, Elsevier, vol. 31(5), pages 554-568.
    13. Orley Ashenfelter & Daniel Hosken, 2010. "The Effect of Mergers on Consumer Prices: Evidence from Five Mergers on the Enforcement Margin," Journal of Law and Economics, University of Chicago Press, vol. 53(3), pages 417-466.
    14. Henry Ergas, 2008. "Should Australia Encourage Developing Countries to Adopt Competition Laws?," Asia Pacific Economic Papers 376, Australia-Japan Research Centre, Crawford School of Public Policy, The Australian National University.
    15. repec:pri:cepsud:160ashenfelter is not listed on IDEAS
    16. David Bartolini & Alberto Zazzaro, 2010. "The Anticompetitive Effects of the Antitrust Policy," Contributions to Economics, in: Giorgio Calcagnini & Enrico Saltari (ed.), The Economics of Imperfect Markets, chapter 0, pages 213-232, Springer.
    17. Spagnolo, Giancarlo & Buccirossi, Paolo, 2006. "Optimal Fines in the Era of Whistleblowers," CEPR Discussion Papers 5465, C.E.P.R. Discussion Papers.
    18. González, Xulia & Moral, María J., 2019. "Effects of antitrust prosecution on retail fuel prices," International Journal of Industrial Organization, Elsevier, vol. 67(C).
    19. Gregory Werden, 2008. "Assessing the Effects of Antitrust Enforcement in the United States," De Economist, Springer, vol. 156(4), pages 433-451, December.
    20. Babina, Tania & Barkai, Simcha & Jeffers, Jessica & Karger, Ezra & Volkova, Ekaterina, 2024. "Antitrust Enforcement Increases Economic Activity," CEPR Discussion Papers 18772, C.E.P.R. Discussion Papers.
    21. Zhifeng Gao & Ted C. Schroeder, 2009. "Consumer responses to new food quality information: are some consumers more sensitive than others?," Agricultural Economics, International Association of Agricultural Economists, vol. 40(3), pages 339-346, May.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:apecpp:v:44:y:2022:i:3:p:1327-1339. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1002/(ISSN)2040-5804 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.