Universidad Adolfo Ibañez

Market Power Absent Merger Review: Brewing in Perú

Área de publicación General Management y Estrategia
Tipo de publicación Artículos
Fecha de publicación 2019
Autores Ariel Casarín - Magdalena Cornejo; María Eugenia Delfino

We examine the extent of market power in the brewing market of Perú, where the absence of preventive merger review eased consolidation into a single industrial brewer. We use a standard oligopoly model and exploit both seasonality in demand and atypically large and frequent variations in the structure and level of excise taxes to identify variations in market power. Our results provide evidence of the ineffectiveness of competition policy as uncontested mergers resulted in a degree of market power that decreased only with the entry of new firms.

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