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The Decline of Competition: the emergence of a duopoly in the Australian sugar refinery sector, 1841–1915

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Abstract:

The late nineteenth and early twentieth centuries saw the emergence of large single-product organisations whose expansion was stimulated by a desire to control a substantial part of a particular product market. An Australian example is the Colonial Sugar Refining Company Ltd (CSR). By 1915, the company accounted for 90 per cent of refined sugar production in Australia. CSR had achieved this control over the Australian refined sugar market by using underselling, strategies that denied its competitors outlets for their refined sugars and amalgamations with rivals. After 1890, however, CSR was interested in sharing the Australian market for refined sugar with its rivals by forming spheres of influence in marketing areas or adopting production quotas, although the Queensland National Bank was the only organisation to successfully negotiate annual market share agreements with CSR in the 1900s. These agreements ensured the survival of its Millaquin Refinery. Other competitors eventually exited the industry. In 1915, the Commonwealth government institutionalised this duopoly in the sugar refining sector by agreements with CSR and the Queensland government, and allowed it to continue until deregulation of the Australian sugar refining sector in the early 1990s.

Keywords: AUSTRALIA; COMPETITION; DUOPOLY; MARKETS; OLIGOPOLY; SUGAR; SUGAR REFINING

Document Type: Research Article

DOI: http://dx.doi.org/10.1080/00049180120100077

Publication date: November 1, 2001

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