Doctor of Economics, Associate Professor, Professor at the Department of Economic Theory and Competition Policy of KNUTE
VERTICAL COMPETITION IN UKRAINIAN TRADE INDUSTRY
Background. Notwithstanding the relatively low levels of trade markets’ concentration, Ukrainian trade industry is a permanent field of antitrust conflicts, caused by forcing the suppliers of large retail chains to undertake the unfavorable terms of delivery contracts.
Review of scientific sources. The theory of vertical competition is not very popular now though it origins from the publications of J. Robinson and J. K. Galbraith. The problems of vertical competition in trade industry are investigated by E. Toffler, R. Steiner, V. Radaev, A. Mazaraki, G. Piatnitska.
The aim of the research is to find out the vertical competitive situation in Ukrainian trade industry and to define the ways of institutional balancing the bargaining power of suppliers and retailers to raise the efficiency of vertical competition in the industry.
Results. The high coefficients of buyer power of Ukrainian retailers, identified by the author, we should note the inequality of bargaining power breakdown between suppliers and retailers that let the latters to abuse such a power by imposing the unfavorable terms of delivery contracts on the first ones. There are no state regulators of vertical competition in Ukraine, while there is an experience of their establishing in other countries of the world.
Conclusion. There is a critical need of institutional reform of the system of state regulation of competition, especially in the part of vertical competition regulation. The author suggests implementing this reform through establishing the rules of economic dependence that would be valid for all the industries of Ukrainian economy, not only for the trade industry. It lets minimize the counteracting of retailers and raise the efficiency of competition as a market and industry regulator.
Keywords: trade, vertical competition, bargaining power, suppliers, retail chains, state regulation of vertical competition.
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