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... they should forgo the opportunity for short-term gain in order to foster long- term profit. 7 Indeed, produce is typically one of the highest- margin categories in a store, with gross margins ranging from 33 to 36 percent (see Figure 4), while the gross margin for all grocery store products is at least 12 percent lower (Bennett). Although produce margins reflect higher shrinkage and handling costs, the size of produce margins suggests that retailers are able to earn a significant amount of profit from produce sales without side payments from suppliers. ...
Citations
... The main focus of the debate was the possible anti-competitive nature of the practice, with arguments being made for both sides (Bloom et al. 2000). Slotting fees have largely been modelled using insights from game theory (Chambolle and Christin 2017;Innes and Hamilton 2006;Hamilton and Innes 2017;Hamilton 2003;Wright 2007;Baake and von Schlippenbach 2014;Foros, Kind and Sand 2009;Miklós-Thal, Rey and Vergé 2011;Wang, Lau and Wang 2012;Bloom, Gundlach, and Cannon 2000;Sullivan 1997;Patterson and Richards 2000;Sexton, Richards and Patterson 2002). They have especially been applied in fixed settings, such as vertical food value chains, dealing with homogeneous farm products and/or competitive retail sectors. ...
... Slotting fees seem to have different impacts depending on who pays. Sexton, Richards and Patterson (2002) conclude that the fee demanded by retailers is beneficial only for those retailers (even though this type of fee may be efficient), and the fee voluntarily paid by suppliers to monopolize their distribution channel has an anti-competitive effect. ...
This report presents the results of the research project “Pass-Through of Unfair Trading Practices in EU Food Supply Chains: Methodology and Empirical Application”. The purpose of the project is to design and test a monitoring system of unfair trading practices (UTP) along the agri-food supply chain. The investigation has special focus on assessment of the “pass-through effect”, defined as the consequences for the entire supply chain of UTPs adopted in a specific transaction. The report includes: (i) a review of the economic literature for a better understanding of the economic principles of UTPs; (ii) a review of available data sources and past experiences in UTP monitoring; (iii) the illustration of two alternative approaches for UTP monitoring: B-SEA (broad-scope empirical analysis) and IDEA (in-depth analysis); (iv) a test application of the two approaches to the EU fresh fruit sector; (v) a comparative analysis of the IDEA and B-SEA results and (vi) a discussion of the implications of our research.
Small farmers face more challenges in farming than ever before. Examples include competition and consolidation within the global marketplace and low and unpredictable product prices. Evaluation and development of alternative market outlets is one means of helping small farms to become more economically sustainable. From 2000 to 2020 the US population is expected to increase by between 50 and 80 million people. A concomitant increase in consumer demand for local, fresh, specialty and organic produce is also projected. Alternative market outlets that skillfully link local or regional small-scale production with evolving consumer demand are currently lacking. We hypothesize that there is considerable potential for helping small farmers sustain or improve their economic position and fulfill consumer needs by exploiting these connections in the marketplace. This investigation draws from the literature to ascertain whether horticultural auction markets may provide such a link for small farms. The paper characterizes horticultural auction markets using current and historical examples, discusses marketplace changes with special reference to consumer demand, and appraises the value of this market model with respect to the dual challenge of meeting both farmers' and consumers' needs. Current marketplace research and characteristics suggest measured optimism for horticultural auction markets to provide a small farm–consumer link.
Based on recent developments in competition theory, we analyze key aspects of buyer power. The main perspective that we take is one where buyer power is treated as bilateral bargaining power. This represents a key difference from the more standard approach that views buyer power through the lenses of the monopsony model. We also discuss different ways to measure buyer power and analyze in detail its impact on the competitive process and consumers. Copyright 2008 die Autoren Journal compilation 2008, Verein für Socialpolitik und Blackwell Publishing Ltd.
