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Legal-Economic Barriers to Price Transfers in Food Supply Chains

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  • Bremmers, Harry J.
  • van der Meulen, Bernd M.J.
  • Sredojevi, Zorica
  • Wijnands, Jo H.M.
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    Abstract

    Recent price movements have put food supply chains under pressure. On the one side, upward price tendencies on commodity markets result in higher costs to processing firms. On the other side, these firms are confronted with a strong retail sector that is able to prevent compensation to protect consumers’ and own economic interests. Regulatory impediments of European law, especially with respect to foodstuffs, can adversely be utilized as barriers to protect the interest downstream the supply chain. The problem is that legal-economic instruments which can serve to smooth price volatility in supply markets can also opportunistically be used at the expense of the middlesection in food supply chains (i.e., mainly small and medium sized producers). The aim of this article is to identify the legal-economic mechanisms that effect price transfers in food supply chains in the European Union and define policy adjustments to improve pricing mechanisms, while safeguarding the interests of the processing industry. Policy alternatives to improve the smooth functioning of notably intermediate markets in food supply chains are the restructuring of competition law, improved processor information management and creating transparency of value added in the supply chain by means of labelling devices.

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    Bibliographic Info

    Article provided by AGRIMBA in its journal APSTRACT: Applied Studies in Agribusiness and Commerce.

    Volume (Year): 06 (2012)
    Issue (Month): ()
    Pages:

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    Handle: RePEc:ags:apstra:138081

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    Web page: http://www.apstract.net/

    Related research

    Keywords: supply chain; price movements; legal system; food supply; Agribusiness; Food Consumption/Nutrition/Food Safety;

    References

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    1. Philip Vermeulen & Daniel Dias & Maarten Dossche & Erwan Gautier & I. Hernando & R. Sabbatini & H. Stahl, 2007. "Price setting in the euro area: Some stylised facts from Individual Producer Price Data," Working Papers w200705, Banco de Portugal, Economics and Research Department.
    2. Dias, D. & Dossche, M. & Gautier, E. & Hernando, I. & Sabbatini , R. & Stahl , H. & Vermeulen, P., 2007. "Macro Price setting in the euro area: Some stylised facts from Individual Producer Price," Working papers 164, Banque de France.
    3. Habtu Tadesse Weldegebriel, 2004. "Imperfect Price Transmission: Is Market Power Really to Blame?," Journal of Agricultural Economics, Wiley Blackwell, vol. 55(1), pages 101-114.
    4. Hobbs, Jill E., 2010. "Public and Private Standards for Food Safety and Quality: International Trade Implications," eJADE: electronic Journal of Agricultural and Development Economics, Food and Agriculture Organization, Agricultural and Development Economics Division, vol. 11(1).
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    6. Paul W. Dobson & Michael Waterson & Stephen W. Davies, 2003. "The Patterns and Implications of Increasing Concentration in European Food Retailing," Journal of Agricultural Economics, Wiley Blackwell, vol. 54(1), pages 111-125.
    7. M. Ben-Kaabia & José M. Gil, 2007. "Asymmetric price transmission in the Spanish lamb sector," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 34(1), pages 53-80, March.
    8. Stigler, George J, 1992. "Law or Economics?," Journal of Law and Economics, University of Chicago Press, vol. 35(2), pages 455-68, October.
    9. Loader, Rupert & Hobbs, Jill E., 1999. "Strategic responses to food safety legislation," Food Policy, Elsevier, vol. 24(6), pages 685-706, December.
    10. Verbeke, Wim & Roosen, Jutta, 2009. "Market Differentiation Potential of Country-of-origin, Quality and Traceability Labeling," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 10(1).
    11. Oliver E. Williamson, 2000. "The New Institutional Economics: Taking Stock, Looking Ahead," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 595-613, September.
    12. Ollinger, Michael & Mueller, Valerie, 2003. "Managing For Safer Food: The Economics Of Sanitation And Process Controls In Meat And Poultry Plants," Agricultural Economics Reports 33975, United States Department of Agriculture, Economic Research Service.
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