Lianos, Ioannis;
Makris, Stavros;
Stavrakoudis, Athanassios;
Maisin, Jean-Benoit;
Velias, Alina;
Shaw, Harry;
(2024)
Mergers and Concentration in the AgriFood Value Chain - Some Reflections on the Bunge Viterra merger.
(CLES Research Paper Series
3/2024
, pp. pp. 1-123
).
UCL Centre for Law, Economics and Society (CLES): London, UK.
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Abstract
The report explores the recent merger wave in the agri-food value chain from a competition law and policy perspective. It focuses on the recent merger between Bunge and Viterra, which creates a global grain giant to rival Cargill and Archer Daniels Midland, further contributing to the consolidation of the crucial commodity trading and logistics segment of the global food value chain. The report follows first a ‘simple economics’ approach and explores the competitive impact of the Bunge/Viterra on consumer welfare. Then, it adopts a complexity perspective to provide the “big picture” of the broader impact of Bunge/Viterra, by examining all the social costs resulting from the restriction of competition. In our view, Bunge/Viterra might (i) generate non-coordinated, unilateral effects such as higher prices, lower quality and lesser choice, and limit the merged entity’s incentives for innovation and product diversification; (ii) generate coordinated effects, facilitating tacit collusion and coordinated input foreclosure through joint projects and industry initiatives, (iii) facilitate tacit collusion through the cross shareholdings between the merging parties, (iv) reduce merging parties’ innovation incentives and efforts in areas where their R&D activities and products overlap; (iv) diminish innovation diversity, and, thereby, harm the environment and biodiversity by further entrenching the existing agrochem model of agricultural production; (v) generate ecosystemic effects; and (vi) affect negatively various vulnerable stakeholders at different levels.
| Type: | Report |
|---|---|
| Title: | Mergers and Concentration in the AgriFood Value Chain - Some Reflections on the Bunge Viterra merger |
| Open access status: | An open access version is available from UCL Discovery |
| Publisher version: | https://www.ucl.ac.uk/cles/policy-papers |
| Language: | English |
| Additional information: | This version is the version of record. For information on re-use, please refer to the publisher’s terms and conditions. |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL SLASH UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of Laws |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10204256 |
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