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Does Exclusive Dealing Matter? Evidence from Distribution Contract Changes in The U.S. Beer Industry

2016; Wiley; Volume: 64; Issue: 3 Linguagem: Inglês

10.1111/joie.12108

1467-6451

Chia‐Wen Chen, Shiou Shieh,

Economics of Agriculture and Food Markets

We examine whether restricting a beer distributor's external trading opportunities increases the market shares of brands carried by the distributor. We use distribution status changes from the Anheuser‐Busch‐InBev distribution agreement, along with a panel scanner data set from a grocery chain in California, to implement a ‘difference‐in‐differences’ empirical strategy. We find that InBev's market share increased by 6% once InBev was carried by Anheuser‐Busch's exclusive distributors, while InBev's retail price had no significant change. The effect on InBev's market share is stronger for smaller stores that carry more brands. These results are consistent with the efficiency‐based theory of exclusive dealing.