Price setting in the Swedish grocery market : monopoly and monopsony market forces

This paper investigates the level of efficiency in the Swedish grocery market. The effect of market power on price both from retailers to consumers, and from suppliers to retailers is analyzed and discussed. Using three different price studies; the ACNielsen Euro Price Study, the PRO study, and the Consumer Price Index, supported by other sources, and analysis of the defined market using among other tools Herfindahl-Hirschman indexes, I have found that the Swedish grocery prices are quite efficient. Also, I have found that there is low probability that suppliers exert monopoly power over retailers, and that there is low probability that retailers exert monopoly power over consumers. There is a high probability that retailers exert monopsony power over the suppliers, and they seem to share at least parts of the excess profits created with consumers