1. FOODIMA EU Food Industry Dynamics and Methodological Advances Task 1.2 Market structure of the Food Supply Chain in the EU κosτas κaranτininis & Luljeta Hajderllari

2. In-depth Picture and Evaluation of the Market Structure, Concentration and Competition of the Food Supply Chain in the EU

3. Task 1.2 (Reports) FOOD 1.2.1 FOOD industry in the European countries Retail 1.2.2 Retail market in the European countries Specific 1.2.3 Specific report regarding the food industry in Eastern European Countries existing The analysis is conducted on the basis of existing information and literature 1.2 Deadline: Deliverable 1.2 in month 18

4.  Size of enterprises in FDT √turnover √employment  Number of enterprises in FDT  Concentration √Lorenc curves √Gini coefficients  Globalization of food processors 1.2.1FOOD industry in the European countries

5. Turnover in manufacturing Source: Own calculations based on Eurostat SBS

6. Value added in manufacturing Source: Own calculations based on Eurostat SBS

7. Employement in manufacturing Source: Own calculations based on Eurostat SBS

8. Food Industry in Total Source: (Otte Hansen,2005)

9. Branches of Food Industry Source: Own calculations based on Eurostat SBS

10. Branches of Food industry Source: Own calculations based on Eurostat SBS

11. Turnover in meat & dairy Source: Own calculations based on Eurostat SBS

12. Employement in meat & dairy Source: Own calculations based on Eurostat SBS

13. Concentration:Method used  Eurostat data 2000-2005  Turnover and enterprises broken down by size classes for all the EU members  Share of turnover and enterprises  Cumulative percentage  Lorenc curves  Gini coefficients

14. EU-25 1 to 19 10 to1920 to 4950 to 99100 to 249250 to 499500 to 999>1000 Year% of turn %of ent % of turn %of ent %of turn %of ent % of turn %of ent % of turn %of ent % of turn %of ent % of turn %of ent % of turn %of ent 20006.779.55.510.78.75.48.4215.81.514.20.614.10.226.60.1 20016.778.95.41195.68.82.115.81.514.60.613.90.225.80.1  1 to 9 employees, are high in volume but low in value  10 to 19 employees, high number of enterprises with a very low share in turnover  20-49 and 50–99, a considerable number of enterprises with a considerable share of turnover  More than1000 employees, a very small share of enterprises and the highest share of turnover Turnover & enterprises broken down by size classes

15. Lorenz curve 2000-2001 Source: Own calculations based on Eurostat SBS

16. Lorenz curve: EU countries 2000

17. EU-27 1 to 1910 to 1920 to 4950 to 249>250 Years% of turn%of ent% of turn%of ent%of turn%of ent% of turn%of ent% of turn%of ent 20046.178.76.111.18.75.724.33.654.80.9 20056.578.54.711.39.15.725.23.654.50.9  1 to 9 employees are high in volume but low in value  10 to 19 employees high number of enterprises with a very low share in turnover  50 to 249 employees, a considerable number of enterprises with a considerable share of turnover  More than1000 employees, a very small share of enterprises and the highest share of turnover Turnover & enterprises broken down by size classes

18. Lorenz curve 2004-2005 Source: Own calculations based on Eurostat SBS

19. Lorenz curve of the EU members 2005

20. Lorenz curve 2000-2001 Source: Own calculations based on Eurostat SBS

21. Ranking of the EU countries according to Gini coefficients 0.93 0.75 0.89

22. Globalization of food processors  Ranking of Multinational Enterprise (agri-food focus) by food and drink sales  Total sales toward agrifood sales of MNE  The total number of businesses for leading enterprises is counted in both home and host zones and a globalization index is obtained

23. Source: (CIAA, 2007; Rama, 2005); * 2006 classification of FDT enterprises

24. Total & agrifood sales of Top 30 FDT (Billion$) Source: (CIAA, 2007; Rama, 2005); * 2006 classification of FDT enterprises

25. Globalization index of MNE (Muchielli, 1998) a firme can be consideres as :  Ethnocentric  Ethnocentric MNE (more business activity on their home zones than oversees)  Polycentric  Polycentric MNE (limited number of business activity overseas compare to a large number of business activity on their home zone)  Geocentric  Geocentric MNE (the same number of bussines activities in its home zone as in its host zone)

26. Globalization index of MNE  Coca-cola Company and Lactails  Coca-cola Company and Lactails are considered as being geocentric globalized, (from 1988 to 2000 didn’t change anything from its operating strategy in the market) Uniliver, ConAgra Foods Inc Nestle.  As we can see from the table major FDT player that can be considered as polycentric multinationals are Uniliver, ConAgra Foods Inc and to a lesser extent Nestle.  The strategy of these giants in the future is to decrease the number of their activities in both host and home zones

27. Company* Home zone of the parent country 1 Nooftotal Business activities outside the borders 2 No of total Business activities in home market Ratio ½ 1988200019882000 19882000 Nestlé W.Europe341292544 Cargill1 US32794322 PepsiCo Inc. US132410075 Kraft Foods Inc. Archer Daniels Midland US33754360 Unilever Plc/Unilever NV W.Europe431353160 Tyson Foods Inc. US114425 The Coca-Cola Company US112150100 Mars Inc. US22435067 Diageo Plc W.Europe22100 Groupe Danone W.Europe239322100 InBev SA W.Europe11323350 Anheuser-Busch Company Inc. US1162750 ConAgra Foods Inc. US1310131023 Kirin Brewery Company Ltd Japan22475029 Cadbury Schweppes Plc W.Europe223267100 General Mills Inc. US23356760 Suntory Ltd. Japan222610033 Asahi Breweries Ltd. Japan1333 Sara Lee Corporation US34774357 Smithfield Foods Inc. US11100 Heineken N.V. W.Europe11323350 Kellogg Company US12432567 Lactalis W.Europe1111100 Ajinomoto Japan22693322 Dean Foods Company US 11343325 HJ Heinz Company US 33953360 Associated British Food W.Europe 32794322 Source: ( Rama, 2005); * 2006 classification of FDT enterprises

28. Conclusions  Concentration of turnover in large enterprises is increased  Most of the developed countries are higly concentrated such as Dk,Fr, etc,. Globalisation is present and is increasing  FDT industry is the largest sector in manufacturing industry in the EU with regard to turnover (€ 850.3 billion)  FDT the second in value added (€ 188 billion),employment (14%), and number of companies (309.7 thousand) after fabricated metal products  Enterprises are small in terms of turnover but large in terms of employment per enterprise

29. Food industry in the Eastern European Countries  Structure  Conduct  Performance and development  Conclusion and outlook  Data sources available from Eurostat General Information on Countries (GDP, GVA, EMPetc.) Structural Business Statistics (SBS) Short-term business statistics (STS), e.g. Retail Trade Turnover Index EU-Klems

30. Food industry in the Eastern European Countries

31. VERTICAL INTEGRATION ◦ Ref.man (2 case study Hungary and Chzec) CONTRACTS ◦ Ref.man COOPERATIVES ◦Eu dairy & meat cooperatives ◦Development of cooperatives over the years ◦Top EU cooperative RETAIL SECTOR ◦Overview of the retail formats in the EU countries ◦Tha Main players in retailing sector ◦Globalization of retailers COMPETITIVENESS Meeting in Warwick