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Unformatted text preview: C: consumer and retailer surveys showed
that mineral waters and softdrinks are not
49 Definition of relevant product market EC:
EC: Regulatory constraints (especially in
production of mineral water needs authorization
bottling must be done at the source
water must be marketed with a brand name that is
associated with the source
Spring waters have inferior characteristics, but must also
be bottled at source. Can be sold under different brand
None of these constraints apply to softdrinks (they
can use tap water, and have no particular
production and marketing restrictions)
50 Definition of relevant product market EC:
EC: Price level difference mill price of soft
drinks is 2-3 times higher than mineral water
drinks separation of markets
Correlation of prices of different mineral
waters between 0.85 and 1. But correlation
among soft drink prices low or even negative
among prices of mineral waters tended to increase in
past, while soft drink prices decreased
51 Definition of relevant product market Supply
Supply substitution: limited, as soft drink
producers cannot produce mineral water
producers Interesting: EC argued that soft drink
producers could, in principle, enter water
market with purified tap water, but unlikely
that it would happen, as most likely not
accepted by consumers.
accepted However, Coca-Cola Company entered
markets with „Dasani“ water some years later.
52 Definition of relevant product market Should
Should a distinction be made among still
and sparkling or flavoured water?
EC: no differences between sparkling, still and
flavoured waters, as technically it is very easy
to switch production.
to product market is bottled mineral water.
53 Geographic market
Geographic Geographic market was determined to be France.
Transport cost of mineral water are extremely high (low
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This note was uploaded on 01/22/2014 for the course ECON D0T32A taught by Professor Czarnitzkidirk during the Spring '13 term at Katholieke Universiteit Leuven.
- Spring '13