The piece examines how 47 large CPG deals, spanning 129 product markets between 2006 and 2017, changed outcomes for consumers and how those realized effects line up with the screens used by the Federal Trade Commission (FTC) and Department of Justice (DOJ). It focuses on three main questions: what happens to retail prices and quantities after mergers, how well standard structural measures like the Herfindahl‑Hirschman Index (HHI) and its change (ΔHHI) predict those outcomes, and what level of price increase antitrust agencies appear willing to tolerate given uncertainty about merger effects.

Key Takeaways:

1. On average, completed mergers in the sample have small effects on prices—between about −0.5 and 1.1 percent—but this masks substantial heterogeneity, with a standard deviation of roughly 4–8 percentage points and many mergers that either raise or lower prices by more than 3 percent.

2. Using a model of agency decisions under uncertainty, the authors estimate that U.S. antitrust agencies act as if they target remedies for CPG mergers expected to increase prices by more than roughly 4.8–6.3 percentage points, and that tightening this implicit threshold would reduce price‑increasing mergers with minimal additional blocking of mergers that lower prices—but at a much higher enforcement burden.

3. The study finds that changes in concentration (ΔHHI) and the merging firms’ market share are correlated with higher post‑merger price increases and are useful for predicting when prices are likely to go up, lending empirical support to merger guidelines that place structural presumptions on high‑ΔHHI and high‑share deals while also highlighting the need for detailed, case‑specific investigation.

Read the publication.