Market Power in the Food Industry: The Swedish Egg Supply Chain

Abstract

There is an ongoing discussion about the potential increase of market power in the food industry. This study investigates the evolution of market power in the egg supply chain between egg producers and egg packers, using firm-level data from 2001-2019. We use traditional concentration measures and newly developed methods to estimate markups using separate production technologies for egg producers and packers. The markup for egg producers increased between 2002 and 2008, mainly declined between 2008 and 2016, and increased after 2016. For egg packers, markup increased until 2008 and mainly declined after. We find that producers' productivity has a positive impact on packers' markup.