Vertical relationships and dual branding strategies in the Italian food industry

The purpose of this article is to examine the determinants that affect the decision of food firms to produce private label products. In the first part, the authors analyse the dynamics of the diffusion of private labels: three stages of development are identified, and the basic hypothesis is that large firms get involved in the production of private labels only after the introductory phase. In the second part this hypothesis is tested using cross-sectional data for a sample of Italian firms: even if the market share of private labels in Italy is still relatively low, the results confirm that larger firms show a higher willingness to produce private labels in industries where their diffusion is in a more advanced stage