Course paper: Oligopolies in the Cacao-chocolate Sector

VNDakLakModelFarmCacaoDryingSmIf you’ve ever wondered about the market forces that get cacao from the farm to your chocolate bar, confection, beverage, etc… you might enjoy a short paper I wrote for my microeconomics course. It’s focused on oligopolies across the supply chain, from producer countries to brands. The introduction is below, with a link to the full paper.

Sweet Nothings or Nothing Sweet?: Market Power in the Cacao and Chocolate Sector

Introduction

As consumers snack on a Hershey bar or M&M’s, they’re probably not musing over how market powers in cacao production, processing-purchasing-exporting and manufacturing meet in the making of their favorite treat. Yet, oligpolists rule across the value chain—seeking to sway the market individually and collectively. They also counterbalance each other, tempering the effects that one level of the value chain has over another. The following paper unwraps this issue by exploring oligopolies in the mainstream cocoa and chocolate industry[1] since the early 2000’s. The discussion begins with an overview of the supply chain for context. It proceeds to a discussion of oligopolists at each level, characterizing the magnitude and locus of their power, and individual and joint actions designed to increase influence. It concludes with an analysis of supply, demand and prices to show how each level counters the other, yielding competitive market outcomes.


[1] I.e., It excludes the specialty sector, with differentiated varietals that sell for price premiums.

Link to full paper (10 pgs/double spaced)

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