Market Power and European Competition in the Swedish Food Industry

This paper investigates the existence of market power in the Swedish food and beverage industry and how market power has been affected by European competition (the Single Market and Swedish EU membership). The study makes use of a census of some 500 firms for the period 1990-2002. The results show that firms in the Swedish food and beverage industry do enjoy some market power, the degree of which varies significantly across the sectors of the food and beverage industry. Increased foreign competition has contributed to reducing market power in sectors that were protected by tariff and non-tariff barriers to trade prior to Swedish EU membership.