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An Antitrust Economic Analysis of Stop & Shop's Proposed Acquisition of the Big V Shop Rite Supermarket Chain

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  • Cotterill, Ronald W.

Abstract

In early 2002, the Royal Ahold subsidiary, Stop & Shop Supermarkets, offered to purchase the Big V supermarket chain, which was in bankruptcy court after three successive, unsuccessful leveraged buyouts over the past ten years. At a later date, Pathmark Supermarkets joined the offer to purchase. Big V was Wakefern Food Corporation's largest member. The acquisition was a horizontal merger in at least three local markets, Newburgh NJ, Poughkeepsie NY, and Trenton NJ. This research was conducted for the Wakefern Food Corporation who provided much of the underlying data and information. We presented this report to the Bureau of Competition, Federal Trade Commission in March 2002 and to the New Jersey and New York Attorney Generals, Antitrust Section in April 2002. Thereafter, the Federal Trade Commission issued a second request in its merger review, and the bankruptcy judge ruled against the Stop & Shop/Pathmark offer. Big V subsequently was purchased by Wakefern and remains in the Shop Rite supermarket cooperative system.

Suggested Citation

  • Cotterill, Ronald W., 2002. "An Antitrust Economic Analysis of Stop & Shop's Proposed Acquisition of the Big V Shop Rite Supermarket Chain," Research Reports 25194, University of Connecticut, Food Marketing Policy Center.
    • Handle: RePEc:ags:uconnr:25194
    DOI: 10.22004/ag.econ.25194
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    1. Cotterill, Ronald W & Putsis, William P, Jr & Dhar, Ravi, 2000. "Assessing the Competitive Interaction between Private Labels and National Brands," The Journal of Business, University of Chicago Press, vol. 73(1), pages 109-137, January.
    2. Cotterill, Ronald W & Haller, Lawrence E, 1992. "Barrier and Queue Effects: A Study of Leading U.S. Supermarket Chain Entry Patterns," Journal of Industrial Economics, Wiley Blackwell, vol. 40(4), pages 427-440, December.
    3. Salop, Steven C & Scheffman, David T, 1983. "Raising Rivals' Costs," American Economic Review, American Economic Association, vol. 73(2), pages 267-271, May.
    4. R. E. Caves & M. E. Porter, 1977. "From Entry Barriers to Mobility Barriers: Conjectural Decisions and Contrived Deterrence to New Competition," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 91(2), pages 241-261.
    5. Newmark, Craig M., 1990. "A new test of the price-concentration relationship in grocery retailing," Economics Letters, Elsevier, vol. 33(4), pages 369-373, August.
    6. Cotterill, Ronald W. & Dhar, Tirtha Pratim & Franklin, Andrew W., 1999. "Post Merger Price Conduct: A Case Study of Pricing in Connecticut Markets After the 1996 Royal Ahold-Stop & Shop Merger," Research Reports 25198, University of Connecticut, Food Marketing Policy Center.
    7. Ronald W. Cotterill & Andrew W. Franklin, 2001. "A PowerPoint® Deconstruction of the Farm and Retail Price Analysis Presented in "The Public Interest and Private Economic Power: A Case study of the Northeast Dairy Compact"," Issue Papers 22, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    8. Chevalier, Judith A, 1995. "Do LBO Supermarkets Charge More? An Empirical Analysis of the Effects of LBOs on Supermarket Pricing," Journal of Finance, American Finance Association, vol. 50(4), pages 1095-1112, September.
    9. Cotterill, Ronald & Andrew, Franklin, 2001. "A PowerPoint® Deconstruction of the Farm and Retail Price Analysis Presented in "The Public Interest and Private Economic Power: A Case study of the Northeast Dairy Compact"," Issue Papers 169378, University of Connecticut, Food Marketing Policy Center.
    10. Chih-ching Yu & John M. Connor, 2002. "The price-concentration relationship in grocery retailing: Retesting Newmark," Agribusiness, John Wiley & Sons, Ltd., vol. 18(4), pages 413-426.
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    Cited by:

    1. Ronald W. Cotterill, 2002. "The Predatory Impacts of the Ahold/Pathmark Offer to Buy the Big V ShopRite Supermarket Chain," Food Marketing Policy Center Research Reports 064, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    2. Ronald W. Cotterill, 2002. "Comments on the Food Marketing Institutes’ Submission to the FTC Titled “Supermarket Merger Investigations and Remedies”," Issue Papers 27, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    3. Seres, Antal & Juhász, Anikó & Stauder, Márta, 2005. "A kereskedelmi koncentráció hatásának egyes kérdései [Some questions about the effect of trade concentration]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(10), pages 774-794.
    4. Cotterill, Ronald, 2002. "Comments on the Food Marketing Institutes’ Submission to the FTC Titled “Supermarket Merger Investigations and Remedies”," Issue Papers 169384, University of Connecticut, Food Marketing Policy Center.

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