Levels of Cartelization: Scandinavian Perspectives on the Role Cartelization in Business Development

Session organizer/s: Kasper Hage Stjern

Cartels for building materials as construction foundations for building large corporations

Session: 7

Authors: Malin Dahlström

Co-authors: NA

Abstract: This paper follows the Swedish construction group Cementa/Skanska and show how the company has grown and increased their market power through cartels on the domestic market and international agreements and collaborations. In this paper we will show how Skånska Cement, that was the original company, built the company and increased the market shares during the 1900th century especially for products further up in the product chain. The strategy of the company was for a long time to increase the use of cement by increasing and expanding the use of concrete products. In the 1970s the compa-ny dominated the Swedish market for several building materials and when the main company merged with the competing cement company, Gullhögen, it had reached monopoly for several products.

In the paper we follow how different building materials were integrated into the company’s scope and how the company collaborated with companies in other countries in different ways to restrict the competition. One of the main strategies that Skånska Cement used to grow their company with, was to set up affiliated companies for new products. In the affiliated companies’ foreign owners (that owned the patent or had developed the product) became co-owners. The affiliated companies were often set up so that they produced and sold one product, and in connection to the set up the compa-nies set up cartel agreements for their domestic markets and for the markets that they sold the prod-uct on. In this way the product-company also became the core for the cartelization of the product. The companies that co-owned the product-company could also link the restriction of competition to other markets and cartels that they were engaged in. With a diversity of products, the large companies could make sure that their products were favoured on the construction sites and in the large purchase programmes. Collaboration was a clear strategy for the growth and formation of the cement group, but the scale, scope, content and boarder of the cooperation varied.

In the paper material from different companies that produced building materials and were connected to the Skånska Cement (later Cementa) and Skånska Cementgjuteriet (later Skanska) will be used to study the introduction and the development of the products and the company on the Swedish market. The material is available in archives in Sweden: Regional State Archives in Lund and Centre for Busi-ness History. Some products that will be investigated and followed in the paper are: eternit (asbestos cement), plasterboards, sanitation goods, and Siporex, (lightweight concrete).

Drivers of market concentration in the Swedish brewery sector, 1910-1990

Session: 7

Authors: Henric Häggqvist

Co-authors: NA

Abstract: The 20th century generally saw a trend of industrial concentration, and the beer markets were no exception. Indications from the US beer market point towards increased market concentration in the medium run (Greer, 1971). Concentration was partly driven by an increased will of antitrust authorities to allow already large brewing companies to merge with one another (such as Miller and Coors) to form mega-companies (Elzinga, 2011). The effect of mergers has also been an aspect of the British brewing industry, although not on the same scale as in the American case (Slade, 2004). The concentration trend was a distinct feature even in the proud Belgian beer market, where the number of breweries decreased from over 3000 to around 100 across the 20th century, and average brewery size increased twenty-fold (Swinnen & Briski, 2017). In contrast, the German market was notably less concentrated than the two Anglo-Saxon and the Belgian, having partly to do with the fact that beer consumption had clear regional dimensions, creating several large regional producers with similar shares in the national market as a whole (Adams, 2011).

In Sweden, the brewery sector went from being large and lively before World War I, to stale and segmented during the interwar period, with a large decrease in the number of active breweries, with few to no entries in the business for decades to come, and a trend towards large business groups (Sandberg, 2006; Box, 2017). During this era, marked by cartelization with large competition controls, there was no true national market for beer, but more or less all breweries only operated in their home regions. Gabrielsson (1970) noted a clear concentration phase from 1952 to 1967, but maintained that there were enough movement within the market, in terms of changing market shares, for it to still be termed competitive. By the 1980s then, the entire sector had been almost entirely eradicated, with few breweries remaining, and all but one had been nationalized. This paper quantifies market concentration in the long run, from about 1910 to 1990, which has not been done before, to find its take-off and acceleration. Before 1955, both regional and national market concentration is estimated. To find what was driving the concentration trend, several factors are included, such as cartel policies, state regulations and alcohol policy, the structure of exit rates, and the timing and effect of mergers and acquisitions.

Intermediaries of Cartelization: The Regional Circuits of the Norwegian and Swedish Brewery Cartels, 1906-1956

Session: 7

Authors: Kasper Hage Stjern

Co-authors: NA

Abstract: A key issue in cartel research is identifying what aids, or hinders, cartel survival and success. Researchers have highlighted factors such as market conditions, types of goods produced, barriers to entry, and the problem of dissuading cheating through trust. However, a recurring issue has been the lack, or small extent, of surviving material concerning the inside proceedings of cartels concerning their daily administration and allocation of resources. This paper is a comparative, qualitative empirical study that utilizes the extensive archives of the Norwegian and Swedish brewery cartels and their regional sub-units called “circuits” to provide a valuable insight into the daily life of the two cartels and how members vied for influence and resources. Cartel theory is used as an analytical framework. Each cartel was divided into several circuits which had their own administrative apparatus, right of taxing members, and archives. The circuits’ meeting minutes and correspondence are examined to identify how members negotiated and pushed for influencing the national cartel board through their regional circuits. The paper finds that the circuits functioned as intermediaries between the national cartel board and individual members. The national board utilized the circuits for investigating cheating and communicating with members, while members could organize their regional interests to push back against larger and more influential members.