Information Sharing in Food Supply Chains

Information sharing among firms within many industries accounts for a substantial part of the gains from information technology adoption in these industries. In this paper we examine the determinants of information sharing between retailers and their suppliers, in the food industry supply chain. Using a data set known as the Super Market Panel Data gathered by the University of Minnesota's Food Industry Center, the behavior of food retailers is examined in their adoption of information sharing technologies that facilitate vertical exchange of information with suppliers. Evidence supports the hypothesis that retail firms with larger number of suppliers are more inclined to share, rather than to withhold, information. Prior theoretical work suggests that this happens because retail firms with large number of suppliers are less concerned about opportunistic behavior of suppliers from the misuse of retailer information by the supplier. We also find that self‐distribution chains are more inclined to share information. Finally, the structure of the market plays an interesting role in the type of information sharing platforms that the retailers adopt. Dans de nombreux secteurs, l'échange d'information entre entreprises représente une part substantielle des gains issus de l'adoption des technologies de l'information. Dans le présent article, nous avons examiné les déterminants de l'échange d'information entre les détaillants de la chaîne d'approvisionnement alimentaire et leurs fournisseurs. À l'aide de l'ensemble de données Supermarket Panel Data, établi par le Food Industry Center de l'University of Minnesota, nous avons examiné le comportement des détaillants en alimentation quant à l'adoption des technologies d'échange d'information facilitant l'échange d'information vertical avec les fournisseurs. Les observations appuient l'hypothèse selon laquelle les détaillants qui comptent de nombreux fournisseurs sont plus disposés àéchanger qu’à retenir l'information. D'après des études théoriques antérieures, cette situation serait attribuable au fait que les détaillants qui comptent de nombreux fournisseurs sont moins préoccupés par le comportement opportuniste de fournisseurs qui utiliseraient de façon malveillante de l'information sur le détaillant. Nous avons également observé que les chaînes d'autodistribution étaient plus enclines àéchanger de l'information. Finalement, la structure du marché joue un rôle intéressant dans le type de plateformes d'échange d'information qu’adoptent les détaillants.     

Supplier-Retailer Relationships in the UK Fresh Produce Supply Chain

Abstract

Over the past decade, the UK fresh produce (fruit, vegetables, and salads) supply chain has undergone numerous changes, with retailers becoming increasingly powerful. The overall trend is towards the industry being dominated by a few large corporations operating on a national level, with some corporations even operating on a European or global scale. This process, which could significantly impact on the supplierretailer relationships, is examined in this study using indepth interviews with participants from the fresh produce supply chain. Amongst the findings are the following: Supply chain advancements, including backhauling, and factory gate pricing are causing some controversy because suppliers feel that these initiatives do not benefit their relationships with retailers. There is room for supplierretailer relationship improvement in areas such as trust, co-operation, and collaboration. Retailers, who have significant supply chain power, are starting to acknowledge the importance of suppliers in the gaining of gaining retail market share. Lastly, the intense process of supplychain rationalisation that we have seen in recent years appears to be leveling out in the UK fresh produce supply, such that there is less anticipated further rationalisation. The study outlines a series of recommendations for how suppliers (retailers) can improve their relationships with retailers (suppliers).     

Rivalry in Price and Variety among Supermarket Retailers

Recent theoretical models of retail competition suggest that product heterogeneity is critical to retail price and variety strategies. This article provides empirical evidence on supermarket retailers' price and variety strategies using a nested constant elasticity of substitution (NCES) modeling framework. The model is estimated using chain-level scanner data for four major grocery chains in a large, urban West Coast market. The results show that retailers compete for market share using both price and variety. While they all tend to follow moderately cooperative pricing strategies, the extent to which they follow cooperative strategies in variety is less homogeneous.     

Produce Marketing and Retail Buying Practices

Produce suppliers have raised concerns over retailer demands for slotting fees and other promotional allowances. These business practices have long existed in packaged goods trade, but are new to produce, which suppliers attribute to recent retail consolidation. Others argue that these allowances are consistent with the a competitive market, which is confronted with an enormous number of new products, most of which fail. Questions on the applicability of existing antitrust laws has limited their use. Eventually, the situation may rectify itself as more retailers adopt new business strategies that obviate the need for slotting fees and allowances.     

The Australian grocery industry: a competition perspective*

This article discusses whether at a theoretical level the large and growing role of the vertically integrated supermarket chains raises a buyer‐power concern because of potential harm to other retailers, suppliers, and/or consumers. Even if this is possible, whether it is a real concern depends on whether provision exists to constrain the exercise of that power through market responses, such as entry, or through regulatory provisions, such as those contained in the Trade Practices Act.     

Choice of Coordination Mechanism in the Kenyan Fresh Milk Supply Chain

This paper examines the nature and determinants of coordination mechanisms used in the Kenyan fresh milk supply chains, using recent survey data of market participants from Nakuru and Nyandarua districts in Kenya. Three main contractual arrangements are observed in the fresh milk supply chain. These include spot markets, verbal contracts and written contracts. The empirical results indicate that though written contracts are sparingly used in the milk transactions, milk producers are more likely to adopt such contracts compared to traders. The results also show that location of producer, source of market information, distance to markets, travel time to buyers or suppliers, gender of operator, and presence or absence of enforceable contracts significantly influence the type of coordination mechanism used in both producer–buyer and retailer–seller transactions and travel time to milk suppliers.     

International technology transfer through local business linkages: the case of Volvo Trucks and their domestic suppliers in India

Using unique firm‐level data from Volvo Trucks and their 64 manufacturing suppliers in India, this paper focuses on the significance of technology transfer from transnational corporations (TNCs) to their domestic suppliers in developing countries. Our case study shows that a relatively small number of international follow‐source suppliers have captured a dominant part of Volvo's local purchases of components, reducing the opportunities for domestic suppliers to forge business linkages with this foreign TNC. At the same time, the domestic suppliers, as well as the follow‐source suppliers, seem to improve their internal capabilities from the technological assistance given by Volvo as part of their business relationships. Even a simple assembly operation by a TNC seems to generate important linkages and technological upgrading among domestic suppliers, thus enhancing their domestic and international market positions. Volvo's technological assistance to domestic suppliers was also transferred down in the supply chain, contributing to long‐term improvements among the smaller companies that make up the lower tiers of the Indian auto‐component sector.     

Potential implications of COVID-19 on the Canadian pork industry

Canada and the United States have strong economic ties and form part of an integrated North American pork industry. Canada's pork industry is export-oriented, and the United States represents a key market for both live pigs and pork. Pork value chain stakeholders include input suppliers, pig producers, transportation companies, slaughter plants, wholesalers, and retailers. There are three overriding areas of concern for the Canadian pork industry with respect to potential impacts of the current pandemic (COVID-19). The first is Canada/US trade and the ability to continue exporting Canadian live pigs and pork to the United States. The second is labor and the impact of potential absenteeism on all sectors of the pork value chain. The third is global trade, because Canada's pork industry relies heavily on exporting pork to markets around the world.     

Asymmetry in beef,lamb and pork farm-retail price transmission in Australia

The hypothesis of asymmetry in price transmission within the Australian meat market is tested using monthly data for beef, lamb and pork prices at different market levels over the period 1971–1988. The results indicate that asymmetrical price response is a strategy used by beef and lamb retailers and wholesalers to adjust to changing input prices, but not by pork retailers and wholesalers. This difference is perhaps unexpected given the similarity in behaviours relating to price levelling in this market, the high cross-price elasticities of demand between these meats, and the relatively greater degree of concentration in the pork market.     

Corporate real estate,stock market valuation and the reputational effects of eco-certification

Improving the energy efficiency of retail stores has become an important strategy for retailers. However, why do some retailers obtain Energy Star certification for their stores while others do not? We argue that retailers pursue this certification to capture reputational benefits of the Energy Star label when their stock market valuation is low. Using longitudinal data for US retailers (grocery and department stores) over the period of 2002 to 2014, we find that stock market valuation measured by Tobin’s Q explains (1) the likelihood of a retailer obtaining Energy Star certification and (2) the share of Energy Star-certified stores in a retailer’s portfolio. Operating expenses on the other hand do not appear to drive the decision to obtain Energy Star certification. Our results also suggest that the motivations of retailers to obtain LEED and Energy Star certification differ.     

Direct Market Retailer Perceptions of State-Sponsored Marketing Programs

Direct market retailers were surveyed to evaluate their participation and opinions of the Jersey Fresh state marketing program. Other states interested in establishing a similar marketing program could target retailers who are most likely to participate in such a program. Specifically, the study results suggest that retailers with outlets in urban areas or with retail outlets open for more than eight months during the year would be more likely to participate. Retailers who used other logos to identify their fresh produce were more likely to intend to use state promotional logos in the future. A successful approach to recruiting these retailers might be to form partnerships with local cooperative organizations which label and market produce from many growers collectively.     

Estimating Market Power by Retailers in a Dynamic Framework: the Italian PDO Cheese Market

In this article, we evaluate the role of market power by retailers within the supply chain of Parmigiano Reggiano (PR) and Grana Padano (GP), the two most famous Italian quality cheeses. Market power is analysed in the context of a dynamic imperfect competition model of the supply chain, in which retailers are allowed to exert market power both downstream and upstream. We jointly estimate market‐power parameters together with supply and demand elasticities, by means of a structural system of demand, supply and price‐transmission equations, estimated using the generalised method of moments. We find evidence of downstream market power by retailers (toward final consumers) for PR and GP, but no evidence of upstream market power (toward processors/ripeners). These results may be explained by the structure of the supply chain and by the peculiar characteristics of the two cheeses.     

Findings from the Competition Commission's Inquiry into Supermarkets

This paper summarises some of the findings from the Competition Commission's report into supermarkets. First, the paper explains the background to the inquiry. It then presents data showing national and regional concentration, and explores indicators of profitability for the major UK supermarkets, to see if these indicate patterns of excessive profitability. It discusses whether international price comparisons have any role to play in the assessment of the competitiveness of this market. It then addresses pricing issues, particularly: company pricing strategies, evidence on price leading and matching, below‐cost selling, and differential pricing between stores in a chain. The paper then turns to the other main area of the report ‐ supplier relations with supermarkets. A large number of practices were found where supermarkets unreasonably exerted their market power to the detriment of those suppliers and competitors, and because of this the Commission recommended that the OFT should negotiate a code of conduct to govern supermarkets’relations with suppliers. The nature of these practices and the reasons for their being found against the public interest are explained.     

Healthy Competition to Support Healthy Eating? An Investigation of Fruit and Vegetable Pricing in UK Supermarkets

Governments and public health officials are urging the public to eat more fruits and vegetables to contribute to a healthy diet. However, there is concern that a lack of effective competition amongst supermarket retailers has resulted in inflated prices for these products which are deterring consumers from eating more of these healthy foods. We investigate this by examining the nature and extent of price competition for fresh fruits and vegetables amongst UK supermarket retailers, drawing on a panel of weekly retail and corresponding wholesale market prices over a seven‐year period. We find that the extent of supermarket competition varies across the products, being quite intense on some but much weaker on others, where the retailers do not fully respond to each other's prices and where the extent of their competitive interaction varies significantly with each other.     

Straddling Contract and Estate Farming: Accumulation Strategies of Senegalese Horticultural Exporters

This paper draws on primary qualitative data to explore the accumulation strategies of indigenous exporters in the Senegalese horticultural sectors who supply European markets. It argues that exporters straddle contract and estate farming as a strategy to break through and survive in European markets, where the power of large‐scale retailers is increasing and the proliferation of food standards act as a non‐tariff barrier. It also analyses the relative opportunities as well as the costs of contract and estate farming. Then it focuses on how the control of buyers over suppliers is far from complete, revealing downstream and upstream spaces and dynamics of non‐compliance. In conclusion, some reflections on the development of capitalism in Africa are advanced.     

Testing errors, supplier segregation, and food safety

Diagnostic tests provide valuable information to buyers about credence attributes such as food safety and GMO content. Errors in testing, however, can mislead buyers and lead to problems such as adverse selection. The ability to segregate suppliers who can deliver safe food from suppliers who cannot depends on the accuracy of the test procedure. In this article we examine the effect of test sensitivity, specificity, and sampling error on the ability to segregate safe and unsafe suppliers. We find that there is a maximum level of error below which unsafe suppliers are deterred from accepting a utility maximizing buyer's bid price. The maximum error depends on the probability that a supplier's production is unsafe and the cost of producing an unsafe lot, among other things. Understanding this relationship makes it possible to design contracts and government regulations that discourage unsafe suppliers from trading.     

大型水利水电工程信息共享机制研究

针对大型水利水电工程建设中的信息共享问题,从供应商和工程总承包商的角度出发,建立供应商和总承包商信息共享演化博弈模型,并进行数值仿真。Matlab仿真结果表明:博弈主体都选择进行信息共享的演化结果受可共享信息量、信息收益系数、"搭便车"收益系数、信息共享成本系数影响;且业主单位可以通过奖惩措施使得博弈主体都选择进行信息共享决策,从而提高工程建设效率,缩短工期,降低工程建设成本。     

Activists and Animal Welfare: Quality Verifications in the Canadian Pork Sector

Animal welfare is an emotive topic. Although most governments legislate against outright animal cruelty, animal welfare organisations have actively lobbied for more stringent farm animal welfare regulations. Food retailers and restaurant chains have faced pressure from animal welfare organisations to implement more stringent animal welfare requirements for their suppliers. Is the demand for more stringent farm animal welfare protocols primarily determined by a subset of consumers with very strong preferences or does it signal a more fundamental underlying change in societal preferences? Given the credence nature of farm animal welfare, whom do consumers trust for credible quality assurances? This article analyses the role of quality verification in a market characterised by consumers with heterogeneous preferences for animal welfare. Of particular interest are the relative strength of preferences for humane animal treatment assurances and the credibility of these quality claims. Using data from a Canadian survey targeted at two distinct samples – a general population group and members of animal welfare organisations – a discrete choice experiment is used to assess consumer attitudes towards animal welfare assurances for pork products. The credibility of quality verification by public sector, private sector and third party agents is assessed. Evidence confirms that consumer preferences for farm animal welfare assurance and the source of verification are indeed heterogeneous. Although a portion of consumers remain largely indifferent to pork products with animal welfare assurances, a group of highly motivated consumers exist with an economic incentive to lobby for tougher animal welfare standards.     

Beef import market shares in Taiwan: implications for Australia

Market shares of major beef suppliers to Taiwan, including Australia, the United States and New Zealand, were estimated econometrically to determine their relative competitiveness. The analysis, based on monthly data from June 1990 to August 1997, showed that relative prices and consumer incomes were important factors influencing suppliers' market shares. Specifically, the demand for Australian beef responded little to an increase in price and negatively to an increase in consumer income. Furthermore, the growth in Taiwan beef consumption has slowed down and Australian beef suppliers need to re-assess the market potential and develop appropriate marketing strategies to maintain competitiveness.     

Alternative Demand for University Outreach Services from Georgia's Golf Industry

Recent technological advancements have influenced farmers' growing demand for private information suppliers, a service traditionally monopolized by public outreach programs of land grant educational institutions. This waning appeal for university extension services creates pressure for these institutions to explore other market segments to broaden their audience coverage. This study demonstrates a potential market niche in Georgia's golf industry for university outreach services. Binomial logistic regression results indicate that significant demand ( a ) is negatively influenced by golf facility size; ( b ) is directly related to the level of industry experience of the golf superintendents; and ( c ) could come from facilities that require assistance in growth-, pest-, and employment-related concerns.