AbstractMarket power is defined in terms of a firm's ability to affect directly other participants in the market or such market variables as prices and promotion practices. The article distinguishes between short‐run and long‐run power and between offensive and defensive power. More than a dozen sources of power are identified in the food industry. Some of the things commonly regarded as manifestations of market power are unreliable indicators of it. In particular, higher‐than‐average profits and market power do not necessarily go together.