No. 73. ANALYSIS OF THE GREEK FOOD SUPPLY CHAIN

Published in STUDIES

E. Kaditi. 2012. | ISBN: 978-960-341-104-8 

 

studies 73 kaditi exof 200x294Food production, distribution and consumption patterns have altered significantly over the last years in Greece and the European Union (EU) in general. Consumer demands require a wider variety of high value food products driven mainly by increasing per capita income, demographic and socioeconomic shifts, and lifestyle changes; while food supply chains try to meet consumer demands in the most efficient and least cost ways with significant structural changes and technological advances. In addition, consumer spending on food products as a percentage of total expenditure is declining, the proportion of food consumed away from home is increasing, and growing concerns for health and food safety issues influence consumers’ choices. At the same time, the task of moving food from ‘farm to fork’ has become very complex, involving a relatively fragmented sector where a few food processing multinationals and retailers compete in the global market.

 

As a result, urbanisation, industrialisation, globalisation, technological innovation, and social and demographic changes are just some of the factors that dramatically alter the way food, not just in Greece, is produced, distributed and consumed. The food industry sector is essentially an intrinsic part of the food supply chain, which is influenced by a range of factors and plays therefore an important role within the food system. The balance of power within the food supply chain has though shifted away from farmers, who had significant power in the past, towards food processors, who have greater influence over production. The trends and drivers of change have given significant power to retailers as well, who now exercise the greatest control, by dictating terms to farmers and food processors while influencing consumers too.

 

Considering the significant changes observed in the way food is produced, distributed and consumed over the last decades, a study on the development of the Greek food supply chain was commissioned by KEPE – the Centre of Planning and Economic Research – to investigate the impact of the trends and drivers of change on the food actors involved (i.e. farmers, food processors, wholesalers, retailers and consumers), giving particular emphasis on foreign direct investments (FDI). The study contributes to the existing literature along two dimensions: (i) statistical information on the food supply chain of Greece and the EU is presented, using a wide variety of material and providing a comparative approach; and (ii) an in-depth analysis of two main issues is undertaken focusing on the following. As foreign investments are in the focus of most governments around the world in order to be able to set a policy agenda which is successful in promoting FDI, it is necessary to understand their determinants. It is therefore examined whether and to what extent sound institutions and the degree of regulation deter or attract FDI flows in the food industry sector. The study further examines whether ownership and increased competitive pressure affect food retailers’ market power, analysing whether all actors involved in the food supply chain deviate from the pricing behaviour that exists under perfect competition.


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