Competition in Fresh Produce Markets: An Empirical Analysis of Channel Performance

By Timothy J. Richards and Paul M. Patterson

Contractor and Cooperator Report No. (CCR1) 49 pp, September 2003

Fresh produce growers/shippers believe that consolidations in grocery retailing may empower retailers to act less competitively. This study evaluates the extent to which retailers exercise market power in buying from growers and selling to consumers. Sales data for retail chains in six U.S. metropolitan markets are used along with data on grower prices for an analysis on apples, grapes, oranges, and grapefruit. The evidence varies by commodity, but does consistently point to the exercise of market power by retailers in consumer sales; less support is found on buying market power. Market power varies over time and with produce volume.

Keywords: fresh fruits and vegetables, fresh produce, fresh produce marketing channels, supermarket, market power, retail competition, food prices, retail prices, apples, grapefruit, grapes, oranges

In this report ...

Chapters are in Adobe Acrobat PDF format.

• Abstract and Contents, 147 Kb
• Executive Summary, 33 Kb
• Introduction, 41 Kb
• Describing Price Formation in Semi-Perishable Produce Markets, 51 Kb
• Fundamental Question: Do Retailers Have Market Power?, 43 Kb
• Empirical Test of Imperfect Competition in Semi-Perishable Produce, 52 Kb
• Interpretation of the Empirical Results, 85 Kb
• Conclusions and Implications, 36 Kb
• References, 41 Kb
• Technical Appendix, 83 Kb

• Entire Document, 502 Kb

Updated date: September 22, 2003