Analysis of Food and Beverage Industry in Indonesia Using Structure, Conduct and Performance (SCP) Paradigm

12 Pages Posted: 14 Jan 2017  

Yudhistira Permana

Trisakti University - Economic Development Program

Dini Hariyanti

Trisakti University - Faculty of Economics

Date Written: November 30, 2016

Abstract

One of the "Nawacita Programs" Indonesian government is to realize economic independence by moving the strategic sectors of the domestic economy and sustainability resilience of the food and beverage industry. This paper attempt to illuminate of Indonesia’s food and beverage industry using structure, conduct and performance (SCP) paradigm.

We employed Concentration Ratios (CR4), Minimum Efficiency of Scale (MES), Efficiency - X (XEF) and Output Growth to Price Cost Margin (PCM) with analysis data panel. We used value added and wages data on ten food and beverage industry where listed in Indonesia’s Stock Effect on year 2010 until 2015.

The structure of food and beverage industry suggested that an oligopoly with high concentration has been found, albeit declined slightly over period 2010-2015. It is also with the Minimum Efficiency of Scale (MES) showed a decrease barriers to entry. It's mean the food and beverage industry in Indonesia not competitive.

Based on analysis market performance; the highest value of Price Cost Margin during the past 15 years for food and beverage industry in Indonesia's are the PT. Multi Bintang Indonesia Tbk, PT. Prashida Aneka Niaga Tbk and PT. Light Wilmar Indonesia Tbk with the output value is higher than the other companies.

In S-C-P theory, if CR4, MES and Growth decreased then the Efficiency-X will increase, it’s causing Price Cost Margin increased. Variable Price Cost Margin (PCM) is positively and significantly influenced by Efficiency-X (XEF). While variable CR4 and MES as a proxy of market structure and, Growth as a proxy on performance the food and beverage industry in Indonesia does not affect to the PCM. This means that food and beverage industry in Indonesia is not influential as a competitive.

Keywords: SCP, PCM, Oligopoly, Industry

Suggested Citation

Permana, Yudhistira and Hariyanti, Dini, Analysis of Food and Beverage Industry in Indonesia Using Structure, Conduct and Performance (SCP) Paradigm (November 30, 2016). OIDA International Journal of Sustainable Development, Vol. 09, No. 11, pp. 61-72, 2016. Available at SSRN: https://ssrn.com/abstract=2898384

Yudhistira Permana (Contact Author)

Trisakti University - Economic Development Program ( email )

Jl. Kyai Tapa No.1, Grogol, RT.6/RW.16
Tomang, Grogol petamburan, Kota Jakarta Barat
Jakarta, Daerah Khusus Ibukota
Indonesia

Dini Hariyanti

Trisakti University - Faculty of Economics ( email )

Jl. Kyai Tapa No.1, Grogol, RT.6/RW.16
Tomang, Grogol petamburan, Kota Jakarta Barat
Jakarta, Daerah Khusus Ibukota
Indonesia

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