Buyer Power, Private Labels and the Welfare Consequences of Quality Erosion
This article explores the effects buyer power may have on product quality. It argues that, at times excessive pressure on input prices will trigger direct welfare costs to consumers in the form of disguised inferior products. To illustrate quality erosion, the discussion focusses on the unique area of private labels and the relationship between the powerfull buyer and its private label supplier.
For the full article please click here