PRICE TRANSMISSION AND DEMAND GROWTH FOR DIFFERENT PRODUCT FORMS: THE DEMAND FOR SALMON

Ursula L. Tveteraas* and S. Tveteraas
Department of Industrial Economics,
 University of Stavanger
 N-4036 Stavanger, Norway
 U.Landazuri@stud.uis.no

This paper analyzes demand growth and price transmission from Norwegian export prices of fresh salmon to retail prices of different consumer salmon products in France and UK. Earlier studies of price transmission have focused on the two main categories fresh and smoked. In this study we investigate the degree of price transmission for eight different product forms with different degrees of processing. The results indicate that price transmission tend to be greater with less value added products, such fresh fillet and fresh whole, than with more processed products. However, the results do not give strong support for complete price transmission even for those products with the little value added. We also estimate differences in price transmission for same type of products sold as branded or private label. The results indicate that price transmission is greater for private label products indicating that the marketing costs are lower when a brand is not involved.

It is well known that demand growth has been an important factor in causing the growth in salmon aquaculture. Among the most important sources for demand growth is the introduction of new product forms. With our rich dataset we can estimate demand growth at a much higher level of detail than earlier studies. The results indicate that new product forms indeed are important, as this is where most demand growth seem to occur.