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Imperfect competition in the fresh tomato industry

Abstract : In this paper, we analyse the market power of the retail industry in the French tomato market. Following the methods developed in the New Empirical Industrial Organization, we develop a structural model of this industry. The analysis is based on detailed data on nal consumption and prices at both shipper and consumer levels for two types of tomatoes in France. The structural model is composed of a system of demand equations, supply equations and pricing equations which include terms which capture the oligopoly and oligopsony power of the retail sector. We show that i) elasticity of demand varies during the year ii) the retail sector exercise only a ‘moderate’market power iii) the exercise of market power decreases over time iv) If markets were competitive, in the case of tomato ronde retail price would decrease by about 1.2% to 4.5% depending on the year; v) In absence of market power, shipping price might be 6% to 24% higher than observed. We find higher distortions in the case of tomato "grappe". We also find that the distortions tend to decrease over time. We conclude to a moderate exercise of market power of the retail sector in the French tomato market.
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  • HAL Id : hal-02821084, version 1
  • PRODINRA : 20921

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Vincent Requillart, Michel Simioni, Jose Luis Varela Irimia. Imperfect competition in the fresh tomato industry. 38. EARIE Conference, European Association for Research in Industrial Economics (EARIE). BEL.; European Association of Agricultural Economists (EAAE). INT., Sep 2008, Toulouse, France. 26 p. ⟨hal-02821084⟩

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