Larry Digal

Market Power in the Philippine Retail Food Industry: Market Power Models and Estimation in the Food Chain Larry Digal

The global food industry is rapidly restructuring. The rise of supermarkets in recent decades is unprecedented in both developed and less developed countries. The retail and processing food industries are concentrated while the farm sector particularly in less developed countries, are fragmented. There are allegations that this restructuring has created an imbalance of power in the food chain. In the Philippines, for example, there have been allegations that large food retailers exercise market power as they continue to displace small neighborhood stores. However, retailers argue that the manufacturers exercise market power as they operate in highly concentrated markets. This book seeks to examine whether food retailers and processors exercise market power in the input and output markets of a number of unprocessed and processed products in the food marketing chain in the Philippines. A combination of models was used to estimate market power including conjectural variation, bargaining model and times series models. This book would be useful for food chain and policy analysts, econometricians and professionals in fields of marketing and economics.