Browsing by Author "Valtiala, Juho"

This study examined whether dairy processors and retailers have market power in the Finnish dairy chain, and the analysis was limited to the wholesale and the retail market of dairy products. The study of industrial organization and new empirical industrial organization provided methodological framework for the study. Market power has been extensively studied in other dairy chains but attempts to estimate market power in the Finnish dairy chain are few. Market power in the Finnish dairy chain has not been examined with a bilateral oligopoly approach before. The approach allows relaxing the presumptions about price taking. Because the dairy processing and the retail sector in Finland are highly concentrated, presumptions about price taking would have been too restrictive. The results indicate that retailers have market power over consumers but the wholesale market is competitive. According to the results, retailers employ full mark-up in the retail market, and the market is thus characterized by collusive behavior. A need for further research is emphasized. Because the current evidence is scarce, cumulative evidence through further research would be needed.