English, Article edition: Competition in Austrian Food Retailing: An Economic Analysis Michael Böheim

User activity

Share to:
 
Bookmark: http://trove.nla.gov.au/version/99128
Physical Description
  • article
Language
  • English

Edition details

Title
  • Competition in Austrian Food Retailing: An Economic Analysis
Author
  • Michael Böheim
Physical Description
  • article
Notes
  • An economic analysis of competition in the main local and regional food retail markets in Austria finds that regional market leaders already enjoy a share of more than 30 percent in their respective markets, a situation that prevails in all of Austria with the exception of Burgenland. The measure of concentration CR4 is thus more than 80 percent, which means that such market leaders are market-dominating enterprises as defined in the Austrian Cartel Act (KartG, Items 1 and 3 of Para 1a in Section 34). We can therefore assume a dominant position of the respective market leader in (almost all) regional markets, and the concentration is even more pronounced in the local food markets. In nine political districts, the respective market leader has a share of 50 to 70 percent, and still over 40 percent in another 27 districts. The measure of concentration CR4, which is relevant for the application of the KartG, is generally between 80 to 100 percent, excepting only five political districts. The risk, in terms of competition policy, of such a high rate of market concentration is further exacerbated by existing barriers to market entry in the form of restrictive zoning laws that act as obstacles to the development of large-scale consumer markets. Considering the given situation, further trends towards concentration among Austrian food retailers need to be viewed with considerable scepticism in terms of competition policy. This applies in particular to mergers, which greatly impact on a market already highly concentrated, not only since they raise market concentration per se, but also because a merger means that a competing supplier is removed from the market ("oligopolisation"). Competition policy thus must necessarily prevent further market domination because of its inherent risk for competition and its attendant macroeconomic disadvantages. In concrete terms, this means that Austrian food retailers which already dominate local or regional markets should not be permitted to take over any further companies in areas, where they enjoy market dominance. This applies especially when a given merger further raises existing barriers against market entry because the market leader "snatches up" large-size shops ("consumer markets"). This conclusion is in line with Item 2 of Para 2 of Section 42b combined with Section 34 of the KartG, according to which a merger must be prohibited when it is expected to create or strengthen a market-dominant position. Beyond looking at a specific individual situation (food retailing), some general conclusions can be drawn with regard to the content of Austrian competition policy (cf. Tichy, 2000). In Austria, politics either could not or would not prevent extreme market concentration rates in some sectors of the economy (media, various retail sectors, etc.). In view of these past failures, it appears necessary and useful to step up the pace of combating anticompetitive practices (cartels, mergers and abuse of a market-dominating position). Next to monitoring market concentration, more attention should be given to the number of competitors on a given market, since the risk of collusion rises disproportionately when fewer than five major competitors are involved (minimum market share). In order to achieve preventive monitoring of sectors at risk in terms of concentration on the one hand, and greater competition advocacy on the other hand, it is recommended to introduce continuous monitoring of sectors that are liable to the risk of concentration, based on a standardised competition analysis. The findings of such a sectoral monitoring exercise should be updated on a regular basis and published in an annual competition report.
  • Ökonomische Analyse der Wettbewerbssituation im österreichischen Lebensmitteleinzelhandel; Competition in Austrian Food Retailing: An Economic Analysis
  • RePEc:wfo:monber:y:2002:i:5:p:325-338
Language
  • English
Contributed by
OAIster

Get this edition

  • Set up My libraries

    How do I set up "My libraries"?

    In order to set up a list of libraries that you have access to, you must first login or sign up. Then set up a personal list of libraries from your profile page by clicking on your user name at the top right of any screen.

  • All (1)
  • Unknown (1)
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.

User activity


e.g. test cricket, Perth (WA), "Parkes, Henry"

Separate different tags with a comma. To include a comma in your tag, surround the tag with double quotes.

Be the first to add a tag for this edition

Be the first to add this to a list

Comments and reviews

What are comments? Add a comment

No user comments or reviews for this version

Add a comment