| Abstract: | This note presents a framework for examining certain aspects of the interactions between the food processing and distribution sectors in the UK. Both these components of the food industry are characterised by a high and increasing degree of structural concentration such that they have potential market power, and their behavioural interdependence may have implications for economic performance. Indeed, in recognition of this, official enquiries (Monopolies and Mergers Commission (1981) and Office of Fair Trading (1985)) have been conducted into competition in the food retailing sector. Whilst these reports have suggested that increasing structural concentration in the food industry has not been detrimental to the performance goals of economy (price competition), efficiency (resource allocation) and progress (variety, quality, new products), they have stressed the desirability of the continued monitoring of competition. |
