Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Concentration absent in U.S. ethanol industry, FTC finds, (Dec 15, 2015)

By Edward L. Puzzo, J.D.

The large number of market participants in the U.S. ethanol production industry continues to indicate that the market is unconcentrated, making unlikely market participants' exercise of market power to set prices or coordinate on price or output levels, the FTC has reported in its 2015 Report on Ethanol Market Concentration.

Under the Energy Policy Act of 2005, the FTC is required to issue a report annually with its analysis of the ethanol market in order to determine whether the level of competition among industry participants is sufficient to avoid price-setting and other anticompetitive behavior. Similarly with prior such reports, the 2015 report concluded that the industry remains unconcentrated.

Concentration was measured using the Herfindahl- Hirschman Index (HHI). The FTC staff calculated four HHIs for the ethanol industry using two different measures of market share, production capacity, and actual production. Under all of the measures of market share, ethanol production remains unconcentrated, concluded the FTC. The HHIs remain substantially unchanged from the 2014 report. Further, the FTC reported that the market is less concentrated today than it was at the time of the first Report on Ethanol Market Concentration issued in 2005.

News: Antitrust FederalTradeCommissionNews