Market Power Absent Merger Review: Brewing in Perú

Ariel A. Casarin; Magdalena Cornejo; María Eugenia Delfino

doi:10.1007/s11151-019-09703-8

Market Power Absent Merger Review: Brewing in Perú

Ariel A. Casarin^*, Magdalena Cornejo, María Eugenia Delfino

^*Corresponding author for this work

ESE Business School

Research output: Contribution to journal › Article › peer-review

1 Scopus citations

Abstract

We examine the extent of market power in the brewing market of Perú, where the absence of preventive merger review eased consolidation into a single industrial brewer. We use a standard oligopoly model and exploit both seasonality in demand and atypically large and frequent variations in the structure and level of excise taxes to identify variations in market power. Our results provide evidence of the ineffectiveness of competition policy as uncontested mergers resulted in a degree of market power that decreased only with the entry of new firms.

Original language	English
Pages (from-to)	535-556
Number of pages	22
Journal	Review of Industrial Organization
Volume	56
Issue number	3
DOIs	https://doi.org/10.1007/s11151-019-09703-8
State	Published - 1 May 2020

Bibliographical note

Funding Information:
Ariel A. Casarin: Financial support from IDRC-Canada Grant 107206-001 is gratefully acknowledged. We thank three anonymous reviewers and in particular the editor for his valuable suggestions and guidance in improving our paper. All errors are ours.

Publisher Copyright:
© 2019, Springer Science+Business Media, LLC, part of Springer Nature.

Keywords

Antitrust
Brewing industry
Market power
Merger review

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10.1007/s11151-019-09703-8

Cite this

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title = "Market Power Absent Merger Review: Brewing in Per{\'u}",

abstract = "We examine the extent of market power in the brewing market of Per{\'u}, where the absence of preventive merger review eased consolidation into a single industrial brewer. We use a standard oligopoly model and exploit both seasonality in demand and atypically large and frequent variations in the structure and level of excise taxes to identify variations in market power. Our results provide evidence of the ineffectiveness of competition policy as uncontested mergers resulted in a degree of market power that decreased only with the entry of new firms.",

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author = "Casarin, {Ariel A.} and Magdalena Cornejo and Delfino, {Mar{\'i}a Eugenia}",

note = "Funding Information: Ariel A. Casarin: Financial support from IDRC-Canada Grant 107206-001 is gratefully acknowledged. We thank three anonymous reviewers and in particular the editor for his valuable suggestions and guidance in improving our paper. All errors are ours. Publisher Copyright: {\textcopyright} 2019, Springer Science+Business Media, LLC, part of Springer Nature.",

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Market Power Absent Merger Review: Brewing in Perú

Abstract

Bibliographical note

Keywords

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