The competitive impacts of organic private labels in general food retailing

This paper presents an overview of the pro- and anti-competitive impacts of private-label products in the German market for organic products. A large share of organic products in general food retailing is being marketed under private labels while national brands constitute only a share of 32%. The big share of organic private labels can increase buyer power of food retailers. Retailers are able to exert pressure on their manufacturers to ensure that they receive products of the required quality and at the lowest possible price. Despite these anticompetitive effects, private-labelled products can also have pro-competitive impacts. The organic food production sector is characterised by many small manufacturers. For them, the production of organic private labels implicates lower costs. Furthermore, private label goods do not have to compete for shelf-space, and producers do not have to pay slotting allowances.