Appendix 2: Static breakeven analyses for apple and kiwifruit industries
Note: the above estimates are based on a “worst-case scenario” where:
- Market premiums are due solely to market power;
- All market premiums are totally lost upon deregulation; and
- No allowance is made for the dynamic gains from deregulation.
Even in this unrealistic scenario, static efficiency gains of up to only 5.5% for Apple & Pear and 9% for kiwifruit are required. These gains are within the normal static efficiency gains from deregulation (see footnote 14).
