Antitrust analysis of supermarkets: global concerns playing out in local markets

This paper reviews the basic components of antitrust analysis for the supermarketindustry, including definition of product and geographic markets and the measurementof market power. The analysis of prices and profits in a market structure contextremains important, especially in countries such as Australia with very high supermarketconcentration. Firm and brand level New Empirical Industrial Organisation modelsof demand and oligopoly pricing also provide insights for evaluating antitrustclaims. Recent research on vertical pricing games and price transmission expand theanalysis to market channel pricing issues, including coalescing power by supermarketsand food manufacturers. The issues and approaches explained in this paper are relevantfor policy-orientated research on supermarkets worldwide, including Australia.