Investigation of the Determinants of Market Power on Czech Pork Meat Market

Abstract

An increasing market concentration in food retailing has generated concerns about the market power of retailers towards consumers and input suppliers. This is especially true for the Czech Republic, which has a CR5 in food retailing greater than 50%. Based on different indicators of food chain and pork meat market with respect to four groups of meat products with low and high value added it was analysed whether the evidence of market power in the Czech pork market exists. Analysis based on a New Empirical Industrial Organization model investigated the degree of market power of meat processing industry. The evidence of market power in meat processing industry is rather weak, although has increasing trend in the last year accompanying by growing market concentration ratio. However, the empirical results suggest that market power of retailing exists towards consumers and towards input suppliers (in particular, in the case of meat products with higher value added).