Monopolistic to Oligopolistic Competition: How Fast is the Nigeria Flour Market Changing?
The competition in the Nigerian flour industry is real and strong. The development has led to a continuous concentration of the industry into an oligopolistic competition. At present, the two leading firms, flour mills of Nigeria (FMN) and Crown flour mills (CFM) controls 75% of the market share. This is in addition to the fact that these firms are also harboring significant levels of un-utilized capacities which the new change in market structure will help to reduce. The study examined the factors that cause market structures to change and observed the resulting change in market structure will be long termed. One will have expected that the rising cost of diesel and transportation cost across the country will impede this market concentration and allow smaller firms to grow in capacities and consolidate on market share. But the likelihood of this seemed not forth coming in the short run. The study suggests that the continuous concentration of the industry into oligopolistic competition will continue into the near future and prices are expected to be higher with the new market structure. Keywords: Monopolistic competition, oligopolistic competition, flour market, economy, Nigeria.