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- Title
Foaming up a milk empire? Projected effects of a dairy merger.
- Authors
Badruddoza, Syed; McCluskey, Jill J.; Carlson, Andrea C.
- Abstract
The recent bankruptcy of Dean Foods (DF) and subsequent acquisition of a major share by Dairy Farmers of America (DFA) raised an antitrust complaint which led to DF divesting some assets. The current article empirically analyzes the economic impact of a hypothetical merger between DF and DFA. We use retail scanner data of 2008–2018 under a random‐coefficient discrete choice framework. Assuming a constant marginal cost, we find that the merger may slightly increase retail prices of cow milk products‐‐especially organic ones‐‐across the market and the hypothetical market power of DFA in the long run. Related Content: Should we use antitrust policies on big agriculture? Related Content: Competition issues in the U.S. beef industry
- Subjects
DAIRY Farmers of America Inc.; MERGERS &; acquisitions; ECONOMIC impact; BEEF industry; DAIRY products; MARKET power; ANTITRUST law; MILK quality; DIRECT costing; BANKRUPTCY
- Publication
Applied Economic Perspectives & Policy, 2022, Vol 44, Issue 3, p1327
- ISSN
2040-5790
- Publication type
Article
- DOI
10.1002/aepp.13207