Monday, January 15, 2018
Marie-Laure Allain, Ecole Polytechnique, Paris - Department of Economic Sciences, Claire Chambolle, Ecole Polytechnique, Paris - Laboratoire d'Econometrie; National Institute for Agricultural Research (INRA) Stéphane Turolla, Sofia Berto Villas-Boas, University of California, Berkeley - Agricultural & Resource Economics study Retail Mergers and Food Prices: Evidence from France.
ABSTRACT: This paper analyzes the impact of a merger in the French supermarket industry on food prices. Using consumer panel data, we compare the changes in prices for merging and rival firms in affected and comparison markets. We use a novel definition of affected markets when some firms have a local pricing strategy and others a more centralized pricing strategy. We find that prices increase significantly following the merger, and that the merging firms lose market shares. For the rivals, the price increases are larger in local markets, in which concentration increased and differentiation changed after the merger.