Beer Industry in Belgium

Vertical agreements: an empirical price analysis of beer van Passel Steven1 & Wauters Erwin2 1 Hasselt University, Department of Business Economics, Agoralaan Building D, B-3590 Diepenbeek, Belgium 2 ILVO, Social Sciences Unit, Burg. Van Gansberghelaan 115, B-9820 Merelbeke, Belgium Abstract In several countries worldwide, the securities industry structure of the brewery industry is hotshot of a limited and decreasing amount of producers. Such exceedingly concentrated production is most often accompanied by significant market power. Furthermore, a common practice of market behaviour is erect coordination where firms whitethorn decide to combine technologically different production processes, distribution processes, marketing processes or whatsoever other economic process. In fact, the extent of vertical coordination may range along a continuum from a spot market, contracting, strategical alliance, formal cooperation to full vertical integration. A common scheme of breweries is to conclude exclusivity agreements with obstacles. This paper reports on a study analyse the impact of vertical agreements between beer producers and beer selling bars on the beer price. A quantitative analysis of vertical agreements was performed using trace data of Belgian bars.

Executing a principal parcel part analysis we found four relevant components: component 1 (bar location, bar density), component 2 (bar ownership, exclusivity agreement), component 3 (bar type) and component 4 (beer turnover). To determine the impact of these components on the beer price, a regression toward the mean analysis was performed. The results show that the beer price is determined by bar location and bar type. We found no impact of alert vertical agreements between brewers and bars on the beer price. This indicates that other aspects such(prenominal) as bar location and bar type be more important to determine the beer price than the existence of vertical agreements. Key-words: vertical integration, vertical agreements, price analysis,... If you want to get a full essay, order it on our website: Ordercustompaper.com

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