Vertical Relationships and Coordination in the Food System
Vertical Relationships and Coordination in the Food System

Author: Giovanni Galizzi

Publisher: Physica

Published: 2012-05-29

Total Pages: 641

ISBN-13: 9783642487668

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New analysis and empirical evidence on several topics such as the determinants of shape and nature of the vertical relationships in the food system, the determinants of vertical co-ordination and competition, types and mechanisms of co-ordination as well as the consequences for competitiveness, consumer welfare and policy implications are provided. The focus is on vertical issues at different stages of the food chain with a particular emphasis on the increasing role played by retailers in shaping the vertical relationships in the food system through the development of food supply-chain management.

Vertical Integration and Market Performance in the U.S. Food Industries
Vertical Integration and Market Performance in the U.S. Food Industries

Author: Sanjib Bhuyan

Publisher:

Published: 2000

Total Pages: 0

ISBN-13:

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Vertical integration (ownership and contracts) is an integral part of the structural changes that are occurring in the U.S. food system. Because of its potential adverse effect on competition, vertical integration draws attention from public policy makers, industry and academia. We measure the market performance impact of vertical ownership integration of the U.S. food manufacturing industries using a new empirical measure of vertical ownership integration (both backward and forward) that captures both intra-firm and inter-industry forward and backward ownership integration linkages. In general, we found that although the degree of backward vertical integration was higher than the forward vertical integration in the U.S. food industries, both types of integration were very low overall. Using a more reliable measure of market power, we examined the impact of forward vertical integration on market performance of the U.S. food manufacturing industries. Previous research in this area has suggested that vertical integration may have both beneficial (i.e., increasing economic efficiency) and detrimental (e.g., increasing oligopolistic coordination and market power) effects on markets. This study clearly shows that forward vertical ownership integration significantly increases market power in the U.S. food industries and thereby reduces the market performance of these industries. In terms of public policy implications, U.S. anti-trust authorities, who generally do not pay attention to vertical mergers unless foreclosure becomes an issue, need to pay more attention to the issue of market performance when analyzing such types of vertical integration. In addition, the results of this study accord reasonably well with previous inter-industry research on market performance. We realize that data inconvenience imposed some limitations in this study, as it did on all previous studies of this kind. To rectify this continued data problem, we recommend that government data collection agencies expand the scope of their data collection efforts to facilitate future research in this and related areas.