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Marketing Margins and Price Transmission in a Transition Country - The Case of the Hungarian Pork Market

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  • Lajos Zoltán Bakucs
  • Imre Fertő

Abstract

Research on marketing margins and price transmission in food marketing chains in transition economies is still limited. This article investigates the evolution of marketing margins in the Hungarian pork chain between 1992 and 2005, focusing on the relationships between producer and retail prices. This subject is important as the development of market institutions to facilitate the transmission of price information up and down the chain has been relatively slow. During the 1990s, moreover, there was considerable concentration in Hungarian meat processing and food retailing that may have fundamentally altered the competitive relationships between the various agents in the chain. Our estimations suggest a 'structural break' in the marketing margin after April 1996. In the period prior to this date the average margin had been HUF 156/kg but in the period after the break the average value was HUF 119.5/kg, a fall of 23 per cent. We identify possible explanatory factors driving this change. The more important factors were the increased stability introduced to the business environment, partly through policy reforms from the mid-1990s, rising concentration in the pork processing industry, the rise of consumer-oriented supermarkets and more efficient vertical co-ordination in the pork chain. Copyright (c) 2009 The Authors. Journal compilation (c) The Agricultural Ecomomics Society and the European Association of Agricultural Economists 2009.

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Bibliographic Info

Article provided by The Agricultural Economics Society in its journal EuroChoices.

Volume (Year): 8 (2009)
Issue (Month): 3 (December)
Pages: 14-19

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Handle: RePEc:bla:eurcho:v:8:y:2009:i:3:p:14-19

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