Does a Specialized Niche Market Vegetable Processor Enjoy Bargaining Power?

ABSTRACT Agribusiness companies may achieve competitive advantage through specialization within niche markets. One such niche is the fresh‐cut fruit and vegetable market, which has been steadily growing in Germany. This study examines whether the specialization of a German fresh‐cut producer grants it with market power within this niche market. Based on a unique price dataset from a German fresh‐cut producer, results of a Nonlinear Autoregressive Distributed Lag‐Model (NARDL) reveal significant price asymmetries: Depending on the product, increases (decreases) in purchase prices lead mostly to higher (lower) sales prices These findings provide no evidence of structural market power regarding input or output prices. The absence of consistent long‐term price relationships further underscores this finding. While we cannot find structural market power, sporadically higher than normal margins could be attributed to stochastic variation in the arbitrage process. Although the specialized producer in this study operates in a fast‐growing niche market, our results suggest that this alone does not provide the firm with any extraordinary bargaining power.