The process of vertical coordination and its consequences within the beer commodity chain
E. Veselskáhttps://doi.org/10.17221/5129-AGRICECONCitation:Veselská E. (2005): The process of vertical coordination and its consequences within the beer commodity chain. Agric. Econ. – Czech, 51: 419-426.
The paper aims to identify the potential benefits from vertical coordination within the selected commodity chain. The problem is applied to the beer commodity chain because of its high importance in the Czech agribusiness and foreign trade. On the basis of the vertical analysis of the chosen commodity chain, a mathematic model of consumer price simulation is created and the existence of vertical coordination is verified in the analysed commodity chain. This model assumes that input price increases are transmitted to consumers. The retail prices of beer are simulated by holding technology and input-output relationships constant, while production as well as marketing costs change according to the changes in input prices. The simulated retail price is then compared with the actual retail price to indicate productivity gains resulting from vertical coordination passed on to consumers. The results of the Model of Retail Price Simulation show that Czech brewery industry was in the observed period (1994–2002) vertically coordinated.Keywords:
retail price simulation, vertical coordination, agri-food chain and beer