A hub-and-spoke cartel is a collusive relationship between a group of competitors (the spokes) and one (or

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A hub-and-spoke cartel is a collusive relationship between a group of competitors (the spokes) and one (or more) of their common suppliers or customers (the hub). In August 2011, the former Office of Fair Trading in the United Kingdom found that the country's big supermarkets and certain dairy processors had exchanged information to increase the prices consumers paid for milk, butter, and cheese in 2002 and 2003 (The National Archives, 2011). In late 2007 and early 2008 , most of the parties involved had admitted their involvement in anti-competitive practices and had agreed to pay penalties amounting to over \(£ 120\) million. In August 2011, additional penalties were imposed totaling \(£ 49.51\) million. Why would retailers want to help suppliers raise the price of dairy products?

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Microeconomics

ISBN: 9781292215624

8th Global Edition

Authors: Jeffrey Perloff

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