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
In-depth Picture and Evaluation of the Market
Structure, Concentration and Competition of
the Food Supply Chain in the EU
Task 1.2 (Reports)

1.2.1 FOOD industry in the European countries

1.2.2 Retail market in the European countries

1.2.3 Specific report regarding the food industry
in Eastern European Countries

The analysis is conducted on the basis of
existing information and literature

Deadline: Deliverable 1.2 in month 18
 Size of enterprises
√turnover
√employment
in FDT
 Number
of enterprises in FDT
 Concentration
√Lorenc curves
√Gini coefficients
 Globalization
of food processors
1.2.1FOOD industry in the European
countries
Distribution of turnover in manufacturing
industry
Share of turnover per each sector
16
2004
14
2005
12
10
8
6
4
2
0
da
da15
db
dc
dd
de
df
dg
dh
dj
dk
dl
dm
Sectors of manufacturing
Source: Own calculations based on Eurostat SBS
Turnover in manufacturing
dn
Distribution of value added in manufacturing
industry
Share of V. added per each sector
15
13
2004
2005
11
9
7
5
3
1
da
da15
db
dc
dd
de
df
dg
dh
dj
dk
dl
dm
dn
Sectors of manufacturing
Source: Own calculations based on Eurostat SBS
Value added in manufacturing
Distribution of employment in manufacturing
industry
Share of employment per each sector
15
2004
2005
13
11
9
7
5
3
1
da
da15
db
dc
dd
de
df
dg
dh
dj
dk
dl
dm
dn
Sectors of manufacturing
Source: Own calculations based on Eurostat SBS
Employement in manufacturing
Share (%) of Food Industry in the total
25
20
Production
15
Value added
Investments
10
Employment
5
0
be
cz
dk
de
ie
gr
es
lu
hu
nl
at
pl
pt
Source: (Otte Hansen,2005)
Food Industry in Total
sk
fi
se
uk
Share of turnover in
manufacturing
Value added in branches
Meat, meat products
Meat, meat products
fish and fish products
fish and fish products
fruit and vegetables
fruit and vegetables
oils and fats
oils and fats
dairy products
dairy products
grain mill products
grain mill products
animal feeds
animal feeds
other food products
other food products
beverages
beverages
tobacco products
tobacco products
Source: Own calculations based on Eurostat SBS
Branches of Food Industry
Share of enterprises in
manufacturing
Share of employment in
manufacturing
Meat, meat products
Meat, meat products
fish and fish products
fish and fish products
fruit and vegetables
fruit and vegetables
oils and fats
oils and fats
dairy products
dairy products
grain mill products
grain mill products
animal feeds
animal feeds
other food products
other food products
beverages
beverages
tobacco products
tobacco products
Source: Own calculations based on Eurostat SBS
Branches of Food industry
Distribution of tunover in meat and dairy sector (2005)
30
25
20
15
10
5
0
Source: Own calculations based on Eurostat SBS
Turnover in meat & dairy
Meat
Dairy
Distribution of employment in meat and dairy 2005
30
25
20
15
dairy
10
Meat
5
0
Source: Own calculations based on Eurostat SBS
Employement in meat & dairy
 Eurostat
data 2000-2005
 Turnover
and enterprises broken down by size
classes for all the EU members
 Share
of turnover and enterprises
 Cumulative
 Lorenc
 Gini
percentage
curves
coefficients
Concentration:Method used
EU-25
1 to 19
10 to19
20 to 49
50 to 99
100 to 249
Year
% of %of % of %of %of %of % of %of
turn ent
turn ent
turn ent
turn ent
2000 6.7
79.5
5.5
10.7
8.7
5.4
8.4
2
2001
6.7
78.9
5.4
11
9
5.6
8.8
2.1
250 to 499
500 to 999
>1000
% of %of % of %of % of %of % of %of
turn ent
turn ent
turn ent
turn ent
15.8
1.5
14.2
0.6
14.1
0.2
26.6
0.1
15.8
1.5
14.6
0.6
13.9
0.2
25.8
0.1
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
1.0
eu25-00
0.9
eu25-01
equity
0.8
%of turnover
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0.0
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
%of enterprises
Source: Own calculations based on Eurostat SBS
Lorenz curve 2000-2001
1.0
1.0
%of turnover
0.8
0.6
0.4
0.2
0.0
0.0
0.2
0.4
0.6
0.8
1.0
%of enterprises
be
it
uk
cz
hu
no
dk
nl
gr
de
pt
eu25-00
es
ro
Lorenz curve: EU countries 2000
fr
se
EU-27
1 to 19
10 to 19
20 to 49
50 to 249
>250
Years
% of turn %of ent
% of turn %of ent
%of turn %of ent
% of turn %of ent
% of turn %of ent
2004
6.1
78.7
6.1
11.1
8.7
5.7
24.3
3.6
54.8
0.9
2005
6.5
78.5
4.7
11.3
9.1
5.7
25.2
3.6
54.5
0.9
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
1.0
eu27-04
0.9
eu27-05
equality
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0.0
0.0
0.2
0.4
0.6
0.8
Source: Own calculations based on Eurostat SBS
Lorenz curve 2004-2005
1.0
1.0
0.9
0.8
%of turnover
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0.0
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
% of enterprises
be
bg
cz
dk
de
ee
ie
gr
es
fr
it
cy
hu
pl
pt
ro
sk
se
uk
eu27-05
Lorenz curve of the EU members 2005
1.0
eu25-00
0.9
eu25-01
equity
0.8
%of turnover
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0.0
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
%of enterprises
Source: Own calculations based on Eurostat SBS
Lorenz curve 2000-2001
1.0
Gini 2005
1
0.93
0.890.9
0.8
0.75
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
gr
gr
sk
sk
ee
ee
cy
it
cy
ie
it
es
ie
pl
es
pt
pl
be
pt
cz
be
uk
cz
fr
uk
eu
fr
bg
eu
ro
se
de
dk
bg
ro
se
de
hu
dk
at
hu
at
Ranking of the EU countries according
to Gini coefficients
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
Globalization of food processors
Rank
00
1
5
7
11
3
23
6
9
10
12
15
4
21
25
28
14
22
Ran
k 05
1
2
4
3
9
5
Ran
k 06
1
2
3
4
5
6
6
7
10
15
11
12
17
7
8
9
10
11
12
13
21
12
22
16
19
14
15
16
17
18
19
20
21
22
23
Tyson Foods Inc.
The Coca-Cola Company
Mars Inc.
Diageo Plc
Groupe Danone
InBev SA
Anheuser-Busch Company
Inc.
SABMiller Plc
ConAgra Foods Inc.
Kirin Brewery Company Ltd
Cadbury Schweppes Plc
General Mills Inc.
Suntory Ltd.
Asahi Breweries Ltd.
Sara Lee Corporation
Smithfield Foods Inc.
Heineken N.V.
24
25
26
27
28
29
30
Kellogg Company
Lactalis
JBS Swift & Company
Ajinomoto
Dean Foods Company
HJ Heinz Company
Associated British Food
20
18
30
24
24
29
26
29
25
30
23
Name of the firms
nationality
Nestlé
Cargill1
PepsiCo Inc.
Kraft Foods Inc.
Archer Daniels Midland
Unilever Plc/Unilever NV
CH
US
US
US
US
NL/U
K
US
US
US
UK
FR
BE
US
multi-product
beverages, snacks
dairy, snacks, beverages
cereal processing
multi-product
meat
beverages
prepared foods, confectionery
alcoholic beverages
dairy, multi-product
beer
beer, beverages
beer
20.4
19.3
16.8
14.3
14.1
13.4
12.6
US
US
JP
UK
US
JP
JP
US
US
NL
prepared foods
beer, alcoholic beverages
beer, confectionery
prepared foods
alcoholic beverages
beer, alcoholic beverages
prepared foods
meat, processed foods
beer
breakfast cereals, convenience
foods
dairy products
meat products
multi-product
dairy products
prepared foods
sugar, starch, prepared foods
12.2
11.7
11
10.9
9
9.4
9.2
9.2
9.1
8.7
US
FR
US
JP
US
US
UK
Source: (CIAA, 2007; Rama, 2005); * 2006 classification of FDT enterprises
Sales €
Billion
58.5
58.4
28.1
27.5
27.4
21.4
8.7
7.5
7.5
7
7
6.9
6.9
Source: (CIAA, 2007; Rama, 2005); * 2006 classification of FDT enterprises
Total & agrifood sales of Top 30 FDT
(Billion$)
H.J.Heinz Co.
Ajinomoto Co.Ltd
Fonterra Cooperative Ltd
FEMSA de C.V
Swift &Co
Dean Foods Co.
Kellogg Co.
Associated British Foods
Kirin Brewery Co.Ltd
SAB-Miller plc
Sara Lee Corp.
General Mills Inc.
Agrifood sales
Smithfield Foods Inc
Anheuser -busch
Cadbury Schweppes plc
Diageo plc
Heineken N.V.
InBev
ConAgra Inc.
60
Danone
Mars Inc.
Archer Daniels Midland Co
Bunge Limited
Coca-cola Co.
Tyson Foods
Unilever plc
PepsiCo Inc.
Kraft Foods Inc.
Cargill Inc 1
Nestle
80
70
Total sales
50
40
30
20
10
0
(Muchielli, 1998) a firme can be consideres as :

Ethnocentric MNE (more business activity on their home zones than
oversees)

Polycentric MNE (limited number of business activity overseas compare
to a large number of business activity on their home zone)

Geocentric MNE (the same number of bussines activities in its home
zone as in its host zone)
Globalization index of MNE
 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)

As we can see from the table major FDT player that can be considered as
Uniliver, ConAgra Foods
Inc and to a lesser extent Nestle.
polycentric multinationals are

The strategy of these giants in the future is to decrease the number of
their activities in both host and home zones
Globalization index of MNE
Company*
Home zone of the
parent country
1Nooftotal
1988
Nestlé
Cargill1
PepsiCo Inc.
Kraft Foods Inc.
Archer Daniels Midland
Unilever Plc/Unilever NV
Tyson Foods Inc.
The Coca-Cola Company
Mars Inc.
Diageo Plc
Groupe Danone
InBev SA
Anheuser-Busch Company Inc.
ConAgra Foods Inc.
Kirin Brewery Company Ltd
Cadbury Schweppes Plc
General Mills Inc.
Suntory Ltd.
Asahi Breweries Ltd.
Sara Lee Corporation
Smithfield Foods Inc.
Heineken N.V.
Kellogg Company
Lactalis
Ajinomoto
Dean Foods Company
HJ Heinz Company
Associated British Food
2No
Business activities
outside the borders
2000
of total Business activities in Ratio ½
home market
1988
2000
1988
2000
W.Europe
US
US
3
3
1
4
2
3
12
7
2
9
9
4
25
43
100
44
22
75
US
W.Europe
US
US
US
W.Europe
W.Europe
W.Europe
3
4
1
1
2
3
3
1
1
2
2
3
1
7
13
4
2
4
5
5
4
1
3
2
3
2
43
31
25
50
50
60
60
25
100
67
100
100
50
US
US
Japan
W.Europe
US
Japan
Japan
1
1
2
2
2
2
1
3
2
2
3
2
1
6
10
4
3
3
2
2
13
7
2
5
6
3
7
10
50
67
67
100
50
23
29
100
60
33
33
US
US
W.Europe
US
W.Europe
Japan
US
US
W.Europe
3
7
3
4
1
6
7
1
2
3
1
9
43
1
1
1
2
4
1
1
2
1
2
33
25
100
33
57
100
50
67
100
22
1
1
3
4
33
25
3
3
9
5
33
60
3
2
7
9
43
22
2
1
Source: ( Rama, 2005); * 2006 classification of FDT enterprises
9
3
22
33
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
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
Conclusions




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
Food industry in the Eastern European
Countries
Food industry in the Eastern European
Countries

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