Gilthead seabream price dynamics in the Spanish market: The role of retailers and international trade on price linkages

Abstract

This paper extends the literature on price-integration in the gilthead seabream (Sparus aurata) market in Spain by shedding new light on established relationships using additional data allowing investigation of the im-portance of origin. Although the conclusions for the overall market are in the line of those previously reported for market integration and price transmission in the domestic value chain, there are significant differences in the relationships across the price series when the market is disaggregated by countries of origin. While the overall model, with minor differences, confirms Turkey's price leadership and the influence of domestic wholesalers on the changes in the price along the value chain, alternative models with more specific focus on the country of origin show how organization along the value chain and differentiation of domestic product provide different distribution channels and different mechanisms of price transmission. Domestic and international producers establish alliances with downstream agents both at national and international level depending on to the market targeted. Differentiation is exerted by domestic producers based on the origin of the product. Although pro-ducers have lower ability to influence downstream prices, they may be moving into a less volatile price scenario.