Irish Beef Industry: Market Power and International Competitiveness

Irish beef enjoys a high reputation globally and plays an important role in the Irish economy. However, power distribution between farmers and processors has been contested for many years. This thesis provides scientific evidence and measures the degree of market power among different actors in the beef processing industry, using the New Empirical Industrial Organization approach. Conjectural elasticity with supply and demand functions were applied, which conclude that beef processors exert a significant market power over cattle farmers. The findings confirm that Irish beef processors exercise market power over farmers to reduce prices below the marginal cost, indicating an asymmetric power distribution. Along with saturation of export markets for Irish beef, it is necessary to explore its competitiveness in other emerging markets. China, as the largest potential beef market globally, was used to conduct a consumer study on Irish beef. Irish grass-fed beef is seeking Geographical Indication (GI) certification. Therefore, Chinese consumers’ preference and willingness to pay for beef with GIs were examined through a choice experiment and a random parameter logit model. Results confirm that consumers have significant and positive attitudes towards GIs, and are willing to spend a premium price for beef products with GI labels. Unless consumers have full trust in GIs, their functionality in terms of information provision and quality assurance cannot work. Furthermore, to measure Chinese consumer trust for GIs, the level of trust in GIs, its impact on food confidence, and the antecedents of trust were investigated by developing a conceptual model. The model, including trustworthiness of GIs, food products confidence, belief in food system actors, and social trust, was analyzed using a Structural Equation Model with data collected through an online consumer survey. The empirical results reveal that consumers hold positively trustful attitudes towards GIs. The trustworthiness of GIs was found to influence the generation of confidence in products with GI labels in particular for food safety. Consumer studies confirm the potential advantage of Irish grass-fed beef in the Chinese market.