MARKET STRUCTURE AS A VEHICLE FOR ITS PLASTICITY: AN INTRODUCTION TO THE INTERNATIONAL CACHAÇA MARKET FROM THE PERSPECTIVE OF THE INDUSTRIAL ORGANIZATION PARADIGM

Objective: The objective of this study was to present how market structure serves as a vehicle for market plasticity. To achieve this objective, the example of the international cachaça market was used. Theoretical Framework: To understand the structure, we utilized the theory of the Industrial Organizations paradigm. This paradigm specifically considers three areas of concentration for its study efforts: the firm, the markets, and the industries. Method: Using secondary data provided by the English beverage magazine Millionaires, a quantitative study of the distilled beverages market, and more specifically the Brazilian cachaça market, was developed. For the empirical study of the market, measures used included the Concentration Ratio (Cr), the Herfindahl-Hirschman Index (HHI), and the Theil Coefficient (ET). Results and Discussion: In the direct competition of the international distilled beverages market, the cachaça industry stands out with 55.71% of the total market. In terms of concentration in the international distilled beverages market, the concentration ratio (Cr) of the four largest companies was 59.76%, indicating a moderately competitive market. The HHI (Herfindahl-Hirschman Index) was 928.99, which suggests a competitive market according to the standards of the U.S. Department of Justice. The Theil Coefficient (T) was 0.92, indicating a low concentration market. Research Implications: Supported


INTRODUCTION
The Industrial Organization Theory suggests that markets may vary in terms of their structure, i.e. in how far the production and sale of a given product is concentrated on a limited number of players.From this thinking, it is certain to place that the structure of a given market, such as that of cachaça, can change (take shape) as a result of the various strategic actions arising from the rivalry between the companies that play this market, which alter their shares in the market.This participation can also change in the face of the possibility of new entrants and exit of old players, redesigning the current market structure (Begum, 2018;Toma et al., 2017;Elzinga and Scherer, 2016;Nenonen et al., 2014;and others).
But not only change (take shape), the market structure can also be stabilized (maintain form) due to the technological, economic, political and practical conditions that apply in a given market as protectionist barriers to entry or exit of players.Barriers such as economies of scale and specific regulations.These actions serve for the markets to strengthen themselves resisting the pressure of adverse situations.For example, new players who disregard economies of scale will face the disadvantages of dealing with lower-cost players.Just as older players in the market, with greater political power, can organize themselves and get certain laws established in a way that preserves a certain market structure, (Lelissa and Kuhil, 2018;Toma et al., 2017;Lopes, 2016;Nenonen et al., 2014;and others).
In this context, the market structure is a factor contributing to the plasticity of the market.And by plasticity, we understand that it is the capacity of the market to create itself (take shape), to remain as it is (keep shape) or to change (take shape).It is this plastic character that indicates that markets are malleable, always in formation, subject to multiple efforts for change and therefore take on multiple forms.As mentioned in the seminal work, Alderson (1957), plasticity denotes the potential of the market to be remodeled and respond in a different way from this remodeling.
Thus, the objective of this work is to present how the market structure promotes market plasticity.An empirical market was chosen to exemplify the application of the theory.This market was that of cachaça, which is a distilled alcoholic beverage of Brazilian production.The 4 cachaça market, as it will be presented in the work, has been undergoing changes in its structure in the last decade, and antagonistic forces of players have manifested themselves, and we will identify in our work some of these manifestations and how they unleash structural changes that influence the plasticity of the market.
Following this work, a brief contextualization of the cachaça market will be considered, followed by the paradigm approach of Industrial Organizations (IO).During the presentation of OI, the reader will be brought examples and comments of the cachaça market.Then we will move on to the analysis and discussions of the theme.In these analyzes and discussions, more information and comments will be made from the cachaça market.And finally, the final considerations of the work will be set out.

THE CACHAÇA MARKET
Cachaça is a product that is confused with the history of Brazil.Braga and Kiyotani (2015) tell that in the early history of Brazil-colony, period in which the colonizers held power over the natives and slaves brought from Africa, began the cultivation of sugarcane in Brazil.
It was in this period, century.XVI, the economic potential of this cultivation was realized in the colony, and soon, the sugarcane came to figure in a relevant way for the exploitation, mainly for the production of sugar for the European and African market.
One cannot specify where the first Brazilian cachaça distillery was, however, which can be said that the history of cachaça begins when the Portuguese brought to Brazil the sugarcane Currently, in the Brazilian market, cachaça corresponds to 87% of the market share of Brazilian distillates, of which 98% of the producers are small-sized or micro-entrepreneurs.
70% of the national production is industrial cachaça (from columns) and 30% from artisanal cachaça (from alembic).There are 600,000 jobs generated directly and indirectly, without considering the informal market that is still high in some regions of the country.All in all, there are 7.5 billion Brazilian reais in annual turnover in its productive chain.Expo Cachaça (2019).
According to a survey carried out by the Ministry of Agriculture, Livestock and Food Supply (MAPA), cachaça producers total 951 registered establishments.Of these 951, the production leadership is with the state of Minas Gerais, and in the sequence appear the states of São Paulo, Espírito Santo and Rio de Janeiro.Consequently, the concentration of cachaça production is in the southeast region with 671 establishments, accounting for over 70% of national production.Next appears the Northeast region with 138 establishments, corresponding to 14.5%, the South region with 99, therefore 10.4%, the Central-West region with 33, about 3.5% and finally the North region, with only 10 producers, with 1.05% (Gerk el., 2019).
According to Expo Cachaça (2019), about the exports of the drink in the year 2018, It should also be explained that cachaça is considered as artisanal (from a still) when produced from the must in natura of the sugarcane, without the addition of any kind of chemical, and it should also be distilled in copper stills.For industrial manufacturing (column), sugarcane molasses and chemical additives are also used, and fermentation is also allowed in stainless steel vats instead of stills (Alves, 2014;Souza, 2019).

THE INDUSTRIAL ORGANIZATION (IO) PARADIGM
Industrial Organization (IO) is known by several names in the literature, such as 'Economy of Industries', 'Industry and Commerce', 'Industrial Organization and Policy' and 'Business Economy', among others.However, several authors (Elzinga and Scherer, 2016;Lopes, 2016;Begum, 2018) used the term 'Industrial Organization' as an appropriate title for the subject.Despite the diversity of names, there seems to be a consensus on the definition and scope of IOs.In a broader sense, the authors consider IOs to be concerned in three areas: the firm, the markets and the industries.
For example, the most illustrative definition of IO is that of Stigler in his 1968 book The Organization of Industry, which contains all three elements.He defined industrial organization as "the application of microeconomic theory to the analysis of companies, markets and industries" (Lelissa and Kuhil, 2018, p. 76).They defined Industrial Organization as "the study of the operation and performance of imperfectly competitive markets and the behavior of firms in these markets."The definition presents in an interesting way the type of market that the OI study basically provides the greatest attention, namely imperfect competitive market, points out Lelissa and Kuhil (2018).
The existence of imperfect competition or the degree of existence of all the factors mentioned is a reflection of the differences in the market power of the undertakings in the sector.
In this sense, Church and Ware (2000) provided an alternative and very specific definition for IO, namely "is the study of the creation, exercise, maintenance and effects of market power" (Church and Ware, 2000, p. 31).Lelissa and Kuhil (2018) supported by Barthwal (2000) argue that another dimension of the definition of OI is related to the explanation of the field "OI as a field developed from microeconomics and is concerned with the economic aspects of companies and industries seeking to analyze their behavior and draw normative implications" (Barthwal, 2000, p. 15).
The authors explain that there are differences between these two theories.
Microeconomics is formal and deductive, while industrial economics is less formal and more inductive.In addition, microeconomics is a passive approach aimed at maximizing a company's profit, without worrying about operational aspects of the company.The emphasis of the industrial economy is on the operational aspect and tries to explain the functioning and changes in the existing system (Lelissa and Kuhil, 2018).
This argument also receives support from other authors such as Prof. Ramsey (2001), who suggested that the theory's focus on the operational aspect tries to explain the functioning of the market in which a company operates, rather than the company itself.Thus, the market focus of Industrial Organizations is being reflected in the "Structure-Conduct-Performance" model, which states that there is a causal link between the structure of a market in which a company operates, the conduct of the organization and the performance of the organization in terms of profitability.Thus, the theory of industrial organization focuses on the entire industry and market conditions of a company.
The Structure-Conduct-Performance (SCP) paradigm approach can be used to empirically analyze the impact of market power and performance efficiency in a given industry.Begum (2018) explains that the SCP framework is drawn from the economics of the Industrial Organization (IO), in which the interrelation of the operating element of a market is examined as structure, conduct, and performance.SCP's primary model concerned itself with unidirectional relationships from market structure to conduct and performance, and also how The SCP paradigm assumes that the structure of the market would determine a firm conduct that would establish performance.This is a paradigm that is fundamental to the economy of industrial organization.Since its inception, this paradigm has been used to analyze markets and industries, not only in economics, but also in the fields of business management.
For example, the main line of Michael E. Porter's works on competition (Porter's diamond model) is based on assumptions derived from this paradigm (LELISSA and KUHIL, 2018).
For Lopes (2016), the SCP paradigm provides an understanding of how companies are organized, clarifying the reasons for their strategies and performance.Despite the large number of variables involved, the notion of market structure plays an important role within the paradigm and for subsequent analysis.The author mentions that the structure refers to the organizational characteristics of firms that strategically influence the nature of competition and prices within a given market.
In this case, one of the main component variables of the model is the number of companies and their relative size, an element that is normally observed by the degree of concentration of the market.The degree of concentration should be a basic element in industry studies, as it tends to be negatively related to competition, and in empirical terms, normally the measures most used to measure concentration are the Concentration Ratio (Cr), the Herfindahl-Hirchman Index (HH) and the Theil Coefficient (ET).
The Concentration Ratio (Cr) according to Toma et al. (2017) measures the percentage of the volume traded represented by a certain number of participants.It shows whether an industry is dominated by some large companies or many small companies.As a general rule, the literature specifies a concentration index of four companies of 50% or more, which is indicative of a strong oligopoly industry.The ratio of 33 to 50 percent denotes a weak oligopoly and an unconcentrated industry.Thus, the more the market is dominated by some large 8 companies, the higher the concentration index.
In other words, Woodruff (2019) reaffirms the analysis commenting that the higher the percentage of the market controlled by these four largest firms, the less competitive the market is.A proportion in the range of 0% to 50% is considered low and at the same time competitive.
Rates in the 50% to 80% range are moderately competitive markets, and any percentage above 80% is approaching a monopoly.The author further comments that such an analysis can be extended to the Herfindahl-Hirchman index (HH).
The Herfindahl-Hirschman Index (HH) is a measure of market concentration somewhat more advanced than the Concentration Ratio (Cr) of four companies.HH is calculated by summing the square of the market shares of each undertaking in the market.The total ranges from zero, i.e. perfect competition, to 10,000, indicating a monopoly.The U.S. Department of Justice uses HH to assess the effects of corporate mergers.For the US Department of Justice, an HH above 2,500 is considered a highly concentrated and less competitive market, between 1,500 and 2,500 as moderately competitive and less than 1,500 as competitive market (Woodruff, 2019).
It is worth noting the above by Toma et al. (2017), the HH index includes all companies in the calculation.The problem with this measurement is that it needs more data to be collected.
Reducing the individual market shares of companies gives a proportionally greater weight to the market shares of larger companies.The lack of information about small businesses is another problem, although not critical, because these businesses do not significantly affect the calculation.
Take, for example, the international market for distillates.The British magazine specializing in the international distillate market Millionaires (2019) categorizes this market into nine categories, namely: vodka, whiskies, rum, cognac, gin, liqueurs, tequila, Asian spirits and others.In "others" are: bitters, pisco, raki, anise and cachaça.The Other market totaled in 2018 a sales amount of 69,1 million 9 liter boxes.Considering for the calculation of the concentration ratio "Cr" the 4 largest companies of this follow-up, we have: Cachaça 51 with 19.25% of the market, followed by cachaça Pitú with 15.48%, third is cachaça Velho Barreiro with 14.18% and fourth to bitters Jägermeister with 10.85% share in this market Other international distillates.
Therefore, the Cr concentration ratio of the four largest companies in the international distillate market classified as "other" is equal to 59.76% (19.25%+15.48%+14.18%+10.85%) of the total market.Considering the observations made by Woodruff (2019) presented in this paper, it can be said that this market of Others as being a 'moderately competitive' market, From this sum, we arrive at an HH of the international market of distillates category "others" in the value of 928,99.Considering the American Department of Justice standard, an HH of 928.99 indicates a competitive market, as presented by Woodruff (2019).
There is also the Theil coefficient (T), Silva (2016) explains that this is another resource for measuring concentration.This Theil coefficient is also known as the Entropy coefficient.
Originating in the field of information theory, it was adapted to the studies of Industrial Organization by the professor of mathematics and economic management H. Theil, giving rise to the Theil Entropy Coefficient or Theil Index (T), commonly used to measure income distribution.The higher the concentration, the lower the value resulting from the calculation, so that 0 (zero) indicates the maximum concentration and 1 the minimum.The Theil T inequality index is reached by the following expression: Where: n is the number of firms participating in the market in question yi is the company's market share ln is the natural logarithm.
In the example of the international market for distillates in the "other" category, we have the following equation, considering the data in Table 1: )] (3) After carrying out the calculations of Formula 3, we arrive at a value of T (Theil coefficient) equal to 0.92.As explained by Silva (2016), the closer to 1, the lower the concentration of this market and the closer to 0 (zero) the higher the concentration level.In the case of the international market for 'other' distillates, this is a low-concentration market, which favors competition and serves as an incentive for new entrants.

Still on the Industrial Organization (IO) paradigm, professor emeritus of economics at
Washington and Lee University Charles F. Phillips Jr., Phillips Jr (1971 -in memorian), commenting on the seminal work of IO by Professor Frederic M. Scherer of the University of Michigan, puts that with respect to market conduct, the core of Scherer's analysis, the author concludes that although the theory of oligopolistic pricing suggests a tendency to maximize joint industry profits, achieving coordination is not easy, especially when disparities in cost and market share generate conflicting prices and preferences production between the members of the industry.Commercial firms generally seek to maximize profit in the long term rather than in the short term, and often face the threat of new entrants.Consequently, even when an industry exhibits a concentrated market structure, prices may be lower, close to cost.
To take the cachaça market as an example.Looking at Table 1 with the data from the international market of "other" distillates, there are 4 brands of cachaça that emerge, among them Cachaça 51 in 1st place with 19.25% participation in the market and Ypióca in 8th place with a 6.80% participation in the market.In a query to the website of the American Shops, it can be observed that Cachaça 51 silver is being marketed at R $ 19,90 while the cachaça Ypióca silver is at R $ 11,90.Therefore, Ypióca is being marketed 40% cheaper than Cachaça 51.
Already considering the labels of the drink with added value (special, premium etc), we have Perspective of the Industrial Organization Paradigm The volume of Cachaça 51 was 119.7 million liters and the volume of Ypióca reached 42.3 million liters in this international market (Millionaires, 2019).However, as Professor Phillips Jr (1971) pointed out, commercial firms face threats from new competitors with lower prices, close to cost.For example, by comparing these firms producing column cachaça with the traditional small scale stills of artisanal cachaça, the discrepancy is immense (not in all).
According to the Cachaça Map (2015) the small producer gets from the cooperatives, from R$1.00 to R$2.00 per liter of silver cachaça.These prices have been charged at least since 2007, according to the Sebrae News Agency (2007).
Following the reasoning of Prof . Phillips Jr (1971), he still appreciates that, with regard to pricing behavior, the Industrial Organization (IO) analysis suggests that: (i) price discrimination, if systematic, may increase the vigor of competition, (ii) the links between the magnitude of the conglomerate (market concentration) and the performance of the market are fragile and uncertain; (iii) the thesis of price inflation in a free trade has not yet been proven; and (iv) market concentration has only a slightly unfavorable net effect, but investment stability.
Finally, prior to the analyzes and discussions, with respect to product policies, IO considers that there are positive social benefits from advertising and other image differentiations [as we will discuss below].At the same time, advertising can be exaggerated.As the market system as such does not contain a fully satisfactory automatic mechanism to curb advertising abuses, the burden of corrective action falls largely on the government (Phillips Jr, 1971), like the famous phrase "if drink, don't drive!" adopted in the advertisements.

METHODOLOGY
In order to carry out this study, a quantitative approach was adopted, with the aim of objectively and precisely analyzing the dynamics of the international market for cachaça.Data was collected from secondary sources, specifically using information provided by the English beverage magazine Millionaires.This choice was due to the credibility and comprehensiveness of the data presented by the publication, which offers a detailed and up-to-date view on the distilled beverages market.

12
The explanatory method was employed as the main strategy for conducting the research.This method is suitable when seeking to clarify the factors that influence certain phenomena, allowing not only the description of the characteristics of the market, but also the identification of the causal relationships between the different elements studied.
The data collected was subjected to rigorous quantitative analysis, using several common indicators and metrics in market studies.Among the indicators used are the Concentration Ratio (Cr), the Herfindahl-Hirschman Index (HH) and the Theil Coefficient (ET).The Concentration Ratio (Cr) was used to measure the participation of the largest companies in the market, offering a clear vision of the degree of concentration of the cachaça market.The Herfindahl-Hirschman Index (HH) was applied to assess the competitiveness of the market, based on the market distribution between the different companies.The Theil Coefficient (ET) complemented the analysis by indicating the level of inequality in market distribution.
The choice of these indicators is justified by their wide use and acceptance in industrial economy studies, providing a solid basis for the interpretation of results.The data analysis was carried out using specialized statistical software, ensuring the accuracy and reliability of the results obtained.
In short, the methodology adopted in this study combines the robustness of quantitative analysis with explanatory depth, as supported by Toleadono et al (2024), Alali et al (2024) and Zhao and Khan (2024).Allowing a comprehensive and detailed understanding of the structures and dynamics of the international cachaça market.This approach not only clarifies the current market configuration, but also provides valuable insights into possible future trends and developments.

RESULTS AND DISCUSSIONS
Nenonen et al. ( 2014) comment that the Industrial Organization paradigm suggests that empirical markets vary in terms of their structure, i.e. to what extent production/sales is concentrated on a limited number of sellers.In the Brazilian cachaça market, according to Expo Cachaça (2019) are about 30,000 cachaça producers in Brazil, 70% of the production is industrial cachaça (column) and 30% of artisanal cachaça (alembic).
Complementing this information, in the yearbook of cachaça according to the Ministry of Agriculture, Livestock and Supply (Gerk et al., 2019), the registered cachaça producers correspond to 951 producers.Therefore, in a direct relation, we can say according to this data, 13 96.83% of the cachaça producers (29,049 producers) are non-registered producers and that 3.17% of the producers (951 producers) are registered.
Also in terms of production, besides formal and informal production, the cachaça market can be structured in terms of industrial cachaça (column) and artisanal cachaça (still).Although the Ministry of Agriculture, Livestock and Supply (Gerk el., 2019, p. 8) is against this classification due to the lack of regulation: "The use of the name CACHAÇA ARTESANAL is prohibited, until the Technical Regulation laying down the criteria and procedures for the production and marketing of Cachaça Artesanal (item 9.5 of IN nº 13, 2005)"; and "[...], the term Cachaça Industrial or Cachaça Cachaça is not used either Column".
Obtaining the muster to produce cachaça is the same in both productions (industrial and artisanal), however what differs from them is from fermentation, see Figure 1: Paiva (2017) further comments that this method of artisanal production (alembic) involves practices that have preserved traditional knowledge and customs such as the separation (head, heart and syrup) that date back to the colonial period.The use of the copper alembic symbolizes care, quality, differentiation of large-scale industrial production, and protection and concern for consumer health, in contrast to industrial production which is linked only to economic gain.
It is this artisanal production of cachaça, which according to Sebrae (2017), has been granting the drink a status of sophisticated product.And this sophisticated character goes beyond the production process, is present in packaging and labels that follow different models 15 and with unique design in some cases.It is the marketing efforts that have been driving companies to adopt strategies to elevate the drink to a "premium" category in the distillates sector.Alembic cachaças also conquered the consumers of classes A and B, mainly those that are produced by hand in rural properties.There is also added value with the aging of the cachaça in wooden barrels and stainless steel tanks.It is also worth noting that cachaça is the second most consumed drink in the Brazilian market, second only to beer.
As presented by Church and Ware (2000, p. 7), Industrial Organization are defined as "the study of the operation and performance of imperfectly competitive markets and the behavior of firms in those markets".And it is exactly the differentiation of the production operations that classify in a different way the cachaça product.Gerk el al. (2019) explains that cachaça can be sweetened, aged, premium and extra premium; in addition to its commercialization to the natural known as "silver", "classic" or "traditional".
Sweetened cachaça is cachaça that contains "sugars in quantities of more than six grams per liter and less than thirty grams per liter" (> 6 g/l of sugar and < 30 g/l).Aged cachaça is cachaça that "contains at least 50% (fifty percent) of cachaça or cane spirit aged in a container of suitable wood, with a maximum capacity of 700 (seven hundred) liters, for a period of not less than one (1) year".Cachaça premium is cachaça that contains "100% (one hundred percent) of cachaça or cane spirit aged in a container of suitable wood, with a maximum capacity of 700 (seven hundred) liters, for a period of not less than one (1) year".And the extra premium cachaça is "the premium cachaça aged for a period of not less than three (3) years" (Gerk el., 2019, p. 7 and 8).
The difference in the conception of each type of cachaça (a study of the operations) is that it also contributes towards a differentiation in the formation of the market and in its plasticity.These differentiations provide different types of added value to the original product, both objectively and measurably and subjectively.As previously exemplified, silver cachaça from the Cachaça 51 brand is being marketed for R$ 19.90, while the same silver cachaça, after undergoing the aging operation, taken to the category of "reserve" by the brand (extra premium), is marketed at R$ 349.90; that is, 17.6 times more expensive (Americanas.com, 2020).
Godoy (2017) comments that in the case of silver cachaça, the drink is extracted from the sugarcane and almost immediately bottled.For this reason, it is only the taste of sugarcane alcohol.With aging the drink gains a "special effect".In the process of preservation in oak barrels, the drink acquires a different color and smell, and starts to show a flavor of wood, with traces of coconut, vanilla and caramel.The characteristics of the drink will vary according to 16 the type of wood chosen and the aging time.The author also comments that it was in 2017 that the Cachaça 51 American Oak Reserve was launched, an effort by the company to seek a more sophisticated audience with more purchasing power.
Paula Videira, marketing manager of the Cachaça conglomerate 51, in an interview with Godoy (2017) said that "the tendency of the cachaça industry is to have varied products, with options for all tastes and pockets".He also comments that the conglomerate puts on the market about 200 million liters of cachaça, adding up the national and international market.And that this volume of production corresponds to 40% of all the cachaça distilled in Brazil.
This effort by the big industries to make their product more sophisticated comes in response to the small artisanal producers of still that already had the practice of aging the drink.
This differentiation of the drink by aging, which gives it peculiar sensory attributes, has become a driver of this market in the last decade (Bonilha Jr, 2017).
With the practice of aging the cachaça by the industrial firms of cachaça de columna, the main differentiating fatora of the artisanal production remains, the use of the still with the separation of the fractions "head, heart and syrup".As mentioned in this paper by Elzinga and Scherer (2016), when Bain establishes the Structure-Conduct-Performance paradigm, it offers a focus on market structure, which is subject to concentration, economies of scale and product differentiation.In this sense, what is the differentiation of the cachaça product in terms of column production that does not carry out the separation of the fractions with the still cachaça product that carries out the separation?
To understand this difference, we must resort to the chemistry of the product and the way of carrying out the operation.According to Galinaro (2011), the product resulting from the alcoholic fermentation of the muster is composed mainly of water (89 to 94% v/v), ethanol (5 to 8% v/v) and a fraction of less than 1% v/v formed by a large number of substances, such as acids, esters, aldehydes, ketones and other alcohols.After fermentation of the must, this juice with the composition presented, called cane wine, is taken to be distilled.It is usually carried by gravity to the still (in the case of artisanal production) or in stainless steel columns (in the case of industrial production), in both cases the wine is heated.
In the sequence, the steam of the wine is cooled and the cachaça is obtained.During cooling, in the case of still production, cachaça is separated into three parts.The first part to be chilled, called the `head' of the cachaça which is discarded and can be used in a refinery for the production of ethanol (fuel alcohol).This first part is discarded to guarantee the quality of the cachaça, since if some impurity passes through the chimney-catalyst of the still (deflegmador), such as methanol, ethyl carbamate or furfural, these for having a denser molecular weight, will response of the industrial sector not to lose niche market.Thus, as appreciated by Bain in his seminal book on Industrial Organizations and mentioned in this work by Elzinga and Scherer (2016), one of the influencers for the Structure-Conduct-Performance paradigm is product differentiation, and it is exactly this product differentiation in the cachaça market that has been promoting with the market structure become vehicle of its plasticity.

FINAL CONSIDERATIONS
The objective of this work was to present how the market structure promotes the plasticity of the market through the exemplification of the cachaça market.We use the paradigm theory of Industrial Organizations for this.This paradigm, in its scope, specifically considers three areas of concentration for its study efforts, namely: the firm, the markets and the industries.Supported by the Structure-Conduct-Performance approach, the Industrial Organization made it possible to identify some dynamics in the cachaça market.
In terms of the cachaça industry, its representation in the international distillate market was appreciated.The Brazilian cachaça industry competes directly with bitters, pisco, raki, and anise; and indirectly with vodka, whiskies, rum, brandy, gin, liqueurs, tequila, and Asian drinks.
In the direct competition of the international distillate market, the cachaça industry stands out with 55.71% of the total market.And the marks that emerge are: Cachaça 51, Pitú, Velho Barreiro and Ypióca.
In terms of international distillate market concentration, the concentration ratio (Cr) of the four largest companies in the market was 59.76%, indicating a moderately competitive market.The HH (Herfindahl-Hirschman Index) was 928.99, which presupposes a competitive market according to the standards of the US Department of Justice.And the Theil coefficient (T) was 0.92 indicating a low concentration market.
In the Brazilian domestic market, it was exposed that the cachaça industry is divided into two segments, the industrial cachaça and the artisanal cachaça.Industrial cachaça is dominant in the market, with a participation of 70% against 30% of the artisanal cachaça.
However, artisanal follow-up marketing efforts have promoted growth, reaching economic classes A and B and strengthening the drink's image as a sophisticated product.Efforts are primarily to highlight product quality (zero contaminants) and unique sensory experiences from premium and extra premium beverages (aged in wood).The follow-up of industrial cachaça did not lag behind, it also moved to premium and extra premium beverages, promoting an increase in the diversity of products offered in the market.
And in terms of firms, besides the distinction of industrial cachaçarias and alembic, another division presented was that of firms registered with the Ministry of Agriculture, Livestock and Supply (MAPA) against those that are not registered on the MAP.As assessed, the Expo Cachaça (2009) disclosed that there are 30,000 (thirty thousand) producers, however, registered on the MAP, according to the yearbook of cachaça presented by Gerk et al. (2019), there are only 951 producers.Considering that all industrial producers are registered, all 29,049 (twenty-nine thousand and forty-nine) unregistered producers would be in the artisanal market, which represents only 30% of the total market.Therefore, despite being a very significant number of non-registered producers, they have a small share of the market.
Finally, we believe that we have contributed to the understanding of the structure of the cachaça market as well as some of the influences of this structure for the plasticity of the market.
Remembering that when it comes to plasticity, we refer to how the market can take a form, maintain its shape or change its shape.The structure of the market, as presented in this work, denotes a potential to reshape the market, promoting responses to the actions of its players.

Market
Structure as a Vehicle for its Plasticity: an Introduction to the International Cachaça Market from the Perspective of the Industrial Organization Paradigm ___________________________________________________________________________ Rev. Gest.Soc.Ambient.| Miami | v.18.n.1 | p.1-21 | e07741 | 2024.

Market
Structure as a Vehicle for its Plasticity: an Introduction to the International Cachaça Market from the Perspective of the Industrial Organization Paradigm ___________________________________________________________________________ Rev. Gest.Soc.Ambient.| Miami | v.18.n.1 | p.1-21 | e07741 | 2024.6 An evolution of this definition of IO is brought about by Church and Ware (2000, p. 7).

Market
Structure as a Vehicle for its Plasticity: an Introduction to the International Cachaça Market from the Perspective of the Industrial Organization Paradigm ___________________________________________________________________________ Rev. Gest.Soc.Ambient.| Miami | v.18.n.1 | p.1-21 | e07741 | 2024.7 market structure directly affected business performance.Efficiency factors can be assessed by analyzing the industrial structure, conduct and performance.Elzinga and Scherer (2016) point out that this general paradigm shift was the publication in 1959 of Joe S. Bain's landmark book Industrial Organization, which dominated teaching and research in industrial organization for decades to come.In it, Bain firmly establishes the SCP paradigm, offering chapters focusing on market structure (with additional chapters on market concentration, economies of scale, and product differentiation), market conduct (a chapter), market performance (including profit margins, efficiency costs, and technological progressivity), the relationship of performance to market structure, and the various dimensions of public policy.

Market
Structure as a Vehicle for its Plasticity: an Introduction to the International Cachaça Market from the Perspective of the Industrial Organization Paradigm ___________________________________________________________________________ Rev. Gest.Soc.Ambient.| Miami | v.18.n.1 | p.1-21 | e07741 | 2024.

Market
Structure as a Vehicle for its Plasticity: an Introduction to the International Cachaça Market from the Perspective of the Industrial Organization Paradigm ___________________________________________________________________________ Rev. Gest.Soc.Ambient.| Miami | v.18.n.1 | p.1-21 | e07741 | 2024.9 since it is in the second concentration range that goes from 50% to 80%.Already by the settings ofToma et al. (2017), this market falls under the heading of an oligopoly, as it has a rate above 50%.The HH (Herfindahl-Hirschman Index) of the four main firms in the international distillate market classified as other is calculated by summing the squares of the market shares, ___________________________________________________________________________ Rev. Gest.Soc.Ambient.| Miami | v.18.n.1 | p.1-21 | e07741 | 2024.11 Cachaça 51 Reserva in the amount of R $ 349,90 and Ypióca Extra Premium Commemorative 160 years for R $ 205,00.This difference in the marketing price also leads to a 41% less difference from Ipióca compared to Cachaça 51.But regardless of the difference between the values marketed of these two firms (Cachaça 51 and Ypióca), both are industrial firms expressive in terms of production volume.

Market
Structure as a Vehicle for its Plasticity: an Introduction to the International Cachaça Market from the Perspective of the Industrial Organization Paradigm ___________________________________________________________________________ Rev. Gest.Soc.Ambient.| Miami | v.18.n.1 | p.1-21 | e07741 | 2024.

Market
Structure as a Vehicle for its Plasticity: an Introduction to the International Cachaça Market from the Perspective of the Industrial Organization Paradigm ___________________________________________________________________________ Rev. Gest.Soc.Ambient.| Miami | v.18.n.1 | p.1-21 | e07741 | 2024.
International market for 'other' distillates Adapted from MILLIONAIRES.The ranking of the world's million-case spirits brands 2019.In: The Millionaires' Club, June 2019.
Market Structure as a Vehicle for its Plasticity: an Introduction to the International Cachaça Market from the Perspective of the Industrial Organization Paradigm ___________________________________________________________________________ Rev. Gest.Soc.Ambient.|Miami|v.18.n.1 | p.1-21 | e07741 | 2024.10Table1