Abdulai Fofana

The Changing Nature of UK Fish Retailing

A significant change that has occurred in retail markets over the last 20 years has been the rapid decline of specialist food stores (grocers, butchers, and mongers), as supermarkets lay claim to increasing shares of the food market. Indeed, the effect of supermarket dominance has received considerable research attention, and numerous studies have focused specifically on the relationship between concentration, prices, and profits. This approach has provided an understanding of the behaviour and performance of the industry (e.g., Kinsey 1998; Ailawadi, Borin, and Farris 1995) and the existence of market power (Competition Commission 2000). However, there has been relatively little consideration given to the likely effect of these changes on the nature of trade in seafood goods, in terms of product forms and regulation. The effect of supermarket dominance in fish product trade is interesting because of the growth in aquaculture production and significant differences in terms of trade that exist between farmed and wild-caught species. In this paper, we take a brief look at how supermarkets are affecting fish retail. We present the current scale of fish retail in the UK, describe the extent and implications of supermarket dominance, and highlight the key features of wild-caught and farmed fish that differentiate them in terms of supply. The potential incentives for large retailers to influence the nature of fish products that reach the market are then discussed with reference to fish supply industries.

Testing for market power in the UK salmon retail sector

Abstract This paper presents an investigation into the structure of the salmon retail market in the UK. Evidence of the potential for market power is analysed using non‐linear three‐stage least squares to estimate a dynamic error correction model (ECM) following Bresnahan (1982) and Lau (1982) theoretical approaches. Results indicate that the system is well represented by the model and that the market is competitive in both the short and long run. This is the first study using this approach for the UK fish market and our conclusions support findings from previous empirical analyses of the food retail market, albeit using a different methodology.

An ex-ante economic appraisal of Bluetongue virus incursions and control strategies

The incursion of Bluetongue disease into the UK and elsewhere in Northern Europe in 2008 raised concerns about maintaining an appropriate level of preparedness for the encroachment of exotic diseases as circumstances and risks change. Consequently the Scottish government commissioned the present study to inform policy on the specific threat of Bluetongue virus 8 (BTV8) incursion into Scotland. An interdisciplinary expert panel, including BTV and midge experts, agreed a range of feasible BTV incursion scenarios, patterns of disease spread and specific control strategies. The study was primarily desk-based, applying quantitative methodologies with existing models, where possible, and utilizing data already held by different members of the project team. The most likely distribution of the disease was explored given Scotlands agricultural systems, unique landscape and climate. Epidemiological and economic models are integrated in an ex-ante cost-benefit appraisal of successful prevention of hypothetical BTV8 incursion into Scotland under various feasible incursion scenarios identified by the interdisciplinary panel. The costs of current public and private surveillance efforts are compared to the benefits of the avoided losses of potential disease outbreaks. These avoided losses included the direct costs of alternative vaccination, protection zone (PZ) strategies and their influence on other costs arising from an outbreak as predicted by the epidemiological model. Benefit-cost ratios were ranked within each incursion scenario to evaluate alternative strategies. In all incursion scenarios, the ranking indicated that a strategy, including 100% vaccination within a PZ set at Scottish counties along the England–Scotland border yielded the least benefit in terms of the extent of avoided outbreak losses (per unit cost). The economically optimal vaccination strategy was the scenario that employed 50% vaccination and all Scotland as a PZ. The results provide an indicator of how resources can best be targeted for an efficient ex-ante control strategy.

Assessing retail market competition for multi-aquaculture products

Purpose - – The purpose of this paper is to investigate market competition for three product types of salmon (smoke, fresh and whole salmon) to understand whether supermarkets are exercising market power over salmon consumers in the UK retail market. Design/methodology/approach - – Competition and the corresponding pricing conduct among supermarkets are tested by applying dynamic structural simultaneous system equations and using similar data set used by Jaffry Findings - – The results indicate that the market is competitive for fresh fillets and whole salmon but retailers appeared to exert some level of market power for smoke salmon. The hypothesis that market power is the same for all three products in the study was rejected; further indicating that the market for fresh products are competitive while retailers may be exercising market power over consumers for smoke salmon. Research limitations/implications - – Current data limitations did not allow the investigation to cover the past few years in the modelling process. However, the results are still relevant as there have been no major structural changes in aquaculture products retailing landscape in the recent past. Practical implications - – Concerns over the supermarkets’ exercise of market power over consumers have prompted the competition authorities to continue investigating the situation in the UK supermarket sector since 1996. The most recent investigation by competition authorities was in 2006. In all cases, no evidence of market power was found despite increased market concentration. Results from this study generally uphold the claim of the competition authorities in the UK. Originality/value - – This is the first study to use a model within a structural econometric framework of firms to test for competitiveness of salmon products in the UK market place.