Naked slotting fees for vertical control of multi-product retail markets

Slotting fees are fixed charges paid by food manufacturers to retailers for access to the retail market. This note considers this practice in the context of multi-product markets with imperfectly competitive retailers, a monopoly supplier of one good, and competitive suppliers of other goods. We show how the monopolist and the retailers can use “naked” slotting fees-charges imposed on the suppliers of other goods-to obtain vertically integrated monopoly profits.