Retail Marketing Margins for Dairy Products in Malawi.

Malawi's consumption of milk per capita has stagnated during the last two decades at 4-6 kg/capita/year, one of the lowest in Africa. In contrast, the number of supermarkets in the country has been growing at a fast pace. The literature on the emergence of supermarkets has focused mostly on their effects on domestic supply chain structure and, to a lesser extent, on whether the prices offered in supermarkets are different to those of traditional retailers. The contribution of this paper to the literature is to analyse supermarket marketing margins for a case study: dairy products in Malawi. The methodology consisted in estimating retail marketing margins based on a retail audit survey of the supermarkets operating in Lilongwe and Blantyre that collected retail dairy prices and interviews with processors, who provided their price lists. The results indicated high dispersion in marketing margins amongst retailers and products. Furthermore, in some cases, high margins were found for those dairy products targeted at low-income consumers.