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Abstract. This paper explores whether European food-processing and retail industries exert market power towards farmers and consumers. More in particular, this paper analyses (1) whether price changes at the farm level are fully and instantaneously transmitted into changes at the consumer level; and (2) whether there have been changes in the price risk distribution in post-war agri-food supply chains. With respect to the first research question, we do not observe a general pattern of price asymmetry to the disadvantage of farmers and consumers. In general, price symmetry and price levelling are as prevalent as price asymmetry is. With respect to the second question, I observe a shift in price risk from farmers to marketing organizations in the Dutch ware-potato supply chain.

This paper analyses the response of producer, wholesale, retail, and international trade prices to shocks in prices in upstream or downstream stages in the Dutch onion and red pepper supply chains. The analysis allows for asymmetric adjustment among food prices when the wholesale or retail stages exert oligopoly power. The study provides a theoretical underpinning of the relationship between domestic and international prices. Asymmetries in price transmission are examined using the Houck as well as the error-correction approaches. The impulse response analyses show that red pepper prices return to their long-term equilibria relatively quickly, whereas onion prices settle at a new equilibrium after a price shock. Market power in the wholesale sector affects the responses of onion prices but has little or no effect on the responses of red pepper prices. Market power in the retail sector does not affect the onion prices or the red pepper prices. Analysis of weekly price data over the period from 2005 to 2008 suggests asymmetric adjustment in producer-wholesale and international-producer prices in the Dutch onion supply chain. The results also show asymmetric transmission between producer and retail prices for red pepper. [EconLit Classifications: L130; C320; Q110]. C 2015 Wiley Periodicals, Inc.

SummaryThe price gap between organic and conventional food might explain the low market share of organics in the Netherlands. A real-life experiment was carried out in 2006 in order to determine the price sensitivity of consumer demand for organics. Consumer prices of selected organic products were reduced by up to 40% below current market levels. The price elasticity of demand was low, because not all consumers perceived the price reductions. Moreover, the offer of organic varieties is limited, as is the consumer's willingness to pay for the social attributes of organics.

In this article the market power argument for explaining asymmetric price transmission due to market power in case of supply shocks is examined. Moreover, the potential welfare effects are examined. The analysis is performed using an extension of the Azzam and Schroeter (1995) model comprising both oligopsony and oligopoly instead of just oligopsony. The model is given empirical content using data on the Dutch cucumber chain and assuming Cournot competition among retailers who have market power on either the consumer|retail or growers|retail market or both. The results show that in case of a cucumber supply shock and market power, consumer prices change more than growers' prices. Moreover, total welfare effects of market power are small but potentially large income distribution effects exist. [EconLit citations: L130, Q130.] © 2003 Wiley Periodicals, Inc. Agribusiness 19: 19-28, 2003.