Financialisation of the Food Value Chain, Common Ownership and Competition Law

CLES Research Paper Series 4/2019

63 Pages Posted: 29 Oct 2019

See all articles by Ioannis Lianos

Ioannis Lianos

University College London - Faculty of Laws; BRICS Competition Law & Policy Centre - HSE National Research University

Alina Velias

City, University of London - Department of Economics

Dmitry Katalevsky

Russian Presidential Academy of National Economy and Public Administration; HSE-Skolkovo Laboratory for Law and Development

George Ovchinnikov

Skolkovo Institute of Science and Technology

Date Written: August 12, 2019

Abstract

The paper delves into the implications of the financialisation process for competition law enforcement. We consider that the recent debate over common ownership and its impact on competition law and policy integrates one of the dimensions of the financialisation of the economy. This paper offers the first attempt for a theoretical analysis of this topic, focusing on the process of financialisation in the food industry. We explore the possibility that common ownership may constitute a competition concern, raising issues of unilateral effects, horizontal collusion, vertical exclusion and vertical exploitation. This discussion is particularly important in the context of Food Value Chains, with the rise of common ownership as one of the manifestations of the broader trend of the financialisation of the food industry. Many institutional investors are passive investors in the diverse companies that are active at various segments of the Food Value Chain. Although this paper focuses solely on the seed/agro-chem sector, it is possible to identify considerable common ownership in other parts of the Food Value Chain as well, particularly in the segments with the highest levels of economic concentration. In view of the possible negative welfare effects of common ownership on competition and its prevalence in the food sector, it is contended that competition authorities need to develop adequate legal tools to deal with this issue and rely on economics but also other sources of wisdom (e.g. advanced social network analysis) that may enable a better mapping of the complexity of competitive interactions in this sector and be more adequate in the context of a complex economy. Further research will explore the latter issue.

Keywords: financialisation, food value chain, common ownership, concentration, innovation, value chain, vertical competition, unilateral effects, coordinated effects, agrochem

JEL Classification: G3, K21, L1, L4, Q14, Q18

Suggested Citation

Lianos, Ioannis and Velias, Alina and Katalevsky, Dmitry and Ovchinnikov, George, Financialisation of the Food Value Chain, Common Ownership and Competition Law (August 12, 2019). CLES Research Paper Series 4/2019 . Available at SSRN: https://ssrn.com/abstract=3468812

Ioannis Lianos (Contact Author)

University College London - Faculty of Laws ( email )

London
United Kingdom

BRICS Competition Law & Policy Centre - HSE National Research University ( email )

28/11, Shabolovka ulitsa
Moscow, 109028
Russia

Alina Velias

City, University of London - Department of Economics ( email )

Northampton Square
London, EC1V 0HB
United Kingdom

Dmitry Katalevsky

Russian Presidential Academy of National Economy and Public Administration ( email )

Vernadsky Prospect, 84
Москва, 119571
Russia

HSE-Skolkovo Laboratory for Law and Development ( email )

8 Pokrovski Boulevard
Moscow, 109028
Russia

George Ovchinnikov

Skolkovo Institute of Science and Technology ( email )

Novaya St., 100
Skolkovo, 143025
Russia

Register to save articles to
your library

Register

Paper statistics

Downloads
99
Abstract Views
503
rank
273,283
PlumX Metrics