Concentration in the European turbot industry has been increasing in the last two decades, resulting in a market driven today by three major companies. Price elasticity of demand has been studied using the ex-farm data provided by one of these major actors and the trade flows of turbot between the company’s country (Portugal) and the main European market for turbot (Spain). Ex-farm sales data were provided by one of the largest companies (Flatlantic). Export data were downloaded from the External Trade Database of the European Commission. Additionally, exports of wild turbot from the Netherlands to Spain, for testing for potential competition across the two production methods.
Cointegration methods were used for estimating price elasticities, according to the non-stationary properties of the price series. A price elastic demand was rejected in all cases for both farmed and wild products. These results reject a perfect competitive market framework, and suggest an oligopolistic market structure, given the level of industrial concentration and the absence of price competition. Price integration was found across wild and farmed turbot at the production level, where the price series of the Portuguese farm was found to be an exogenous cause of variations in the prices of Dutch wild turbot exported to Spain.
The findings support the consideration of the EU farmed turbot market as an oligopoly, where the main actors avoid price competition in favor of keeping stability in their margins. Further, farmed turbot helps stabilizing the prices of the wild fishery, normally subjected to high volatility.