Chapter 12 introduces a new economic framework to analyse power in the food value chain. Spurred on by the increased interest of policy makers and antitrust authorities over the last decade, academic scholarship has made progress in analysing the origins and consequences of different dimensions of power across the value chain: buyer power, bargaining power, economic dependence. This Chapter summarises the key concepts used to analyse and measure power in the food value chain and explores the different theories of harm that have been developed and occasionally tested in recent cases. Far from representing just a ‘mirror image’ of the exercise of seller power, the analysis of buyer power may at times require a different set of analytical tools and a more detailed, case-by-case understanding of its specific origins and effects. From then on, the authors move to suggesting a broader theoretical framework that would encompass all different dimensions of power in the value chain, under the rubric of vertical power. After defining the theoretical contours of the concept, the authors offer some metrics that enable an empirical verification of the existence and exercise of vertical power.

Chapter 6 examines the rise of concentration in the food value chain, first as a side-effect of the technological transformation of agricultural production, and second as a result of the various merger waves that have occurred during the last three decades. It provides a concise analysis of the degree of concentration in various segments of the food value chain, noting that the trend has been an important increase of concentration. The authors nevertheless note that the causal link between the rise of concentration and price effects remains unclear, and that competition authorities have relied instead in more elaborate theories of harm, than simple structuralism. However, firms’ strategies in the food value chain change and as farmers get locked in larger agri-tech ecosystems, competition authorities become increasingly aware that focusing on price effects in specific product markets may not be the only dimension they should focus on. The food industry is also important from a social perspective, and public authorities increasingly take into account broader public policy concerns, such as the struggle against climate change, the protection of biodiversity and systemic crises like the COVID-19 pandemic. This complex context calls for a public policy response which breaks with the more traditional approaches of acting only within the boundaries of the different policy fields.