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Testing for Buyer Power of UK Salmon Retailers

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  • The development of empirical models and analysis of retailers' conduct as sellers have received the greatest attention by economists. However, the development of empirical models and analysis of retailers' role as buyers have received considerably less attention. Analysing retailers' buying power is equally important in food industries where high concentration along the supply chain is raising concerns over their oligopsony power. This paper presents a model of oligopsony conduct of UK retailers for the main product types for salmon. Based on the New Empirical Industrial Organisation (NEIO) approach as developed by Bresnahan (1982) and Lau (1982) the model parameterises the salmon retail industry's oligopsony equilibrium. The analysis uses microeconomic rationale and a robust modelling approach to test for the evidence of buyer power in the retail markets for the main product forms of salmon. The presence and extent of market power in this industry is important, as it is believed to have significant implications for both allocative efficiency and the equitable distribution of welfare gains between industry participants.
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  • Fofana, Abdulai and Shabbar Jaffry. 2006. Testing for Buyer Power of UK Salmon Retailers. In: Proceedings of the Thirteenth Biennial Conference of the International Institute of Fisheries Economics & Trade, July 11-14, 2006, Portsmouth, UK: Rebuilding Fisheries in an Uncertain Environment. Compiled by Ann L. Shriver. International Institute of Fisheries Economics & Trade, Corvallis, Oregon, USA, 2006. CD ROM. ISBN 0-9763432-3-1
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  • The National Oceanic & Atmospheric Administration Marine Fisheries Service, United States Department of Commerce (NOAA Fisheries); United Kingdom Department for Environment, Food and Rural Affairs (DEFRA); The United States Agency for International Development supported Aquaculture Collaborative Research and Support Program (ACRSP).
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