Antitrust Law Daily Wrap Up, ANTITRUST NEWS: FTC 2013 report finds U.S. ethanol market remains unconcentrated, (Nov 26, 2013)

The market for fuel ethanol in the United States is unconcentrated, with 156 firms nationwide either producing ethanol or likely to begin producing ethanol in the next 12 to 18 months, according to an FTC report on the state of U.S. ethanol production. The FTC report, “2013 Report on Ethanol Market Concentration”, announced on November 26, is the ninth annual report on ethanol market concentration analysis.

The lack of market concentration in the industry has remained the same since the FTC began issuing reports in 2005. The FTC concluded that the low levels of concentration and large number of market participants in the U.S. ethanol production industry indicated that the exercise of market power to set prices, or coordinate on price or output levels is unlikely. The ease of entry and availability of ethanol imports into the U.S. provide additional constraints on the ability of any group of domestic firms to exercise market power.

The FTC calculated market concentration for ethanol production using two measures of market share: production capacity and actual production. The report concluded that there were two more ethanol producers in the U.S. than at the time of the FTC’s 2012 report on ethanol production. The largest ethanol producer’s capacity share decreased slightly to 10.9 percent of domestic ethanol production capacity - below the largest producer’s 11.1 percent share in 2012.

The Commission vote to issue the report, which was prepared by the staff of the Bureaus of Competition and Economics, was 4-0.

News: Antitrust FederalTradeCommissionNews