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Foreign Investment, Supermarkets, and the Restructuring of Supply Chains: Evidence from Eastern European Dairy Sectors

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Author Info
Johan F.M. Swinnen
Liesbeth Dries
Nivelin Noeva
Etleva Germenjia

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Abstract

The combination of transition and globalization since the early 1990s has caused dramatic changes in supply chains globally. This paper uses survey evidence from several Eastern European countries (Albania, Bulgaria, Poland, Slovakia, Romania and Russia) on how these forces affect the dairy sector. In many countries dairy farms are small family farms. Investments by foreign companies in processing and retailing and the opening to international markets have introduced higher standards, leading, in turn, to extensive contracting and vertical coordination in the dairy chain. In countries close to the EU the restructuring of the dairy chain was mostly driven by investments in dairy processing, while in countries further from the EU, and less advanced in transition, retail investments are playing a more important role in driving change throughout the dairy chain. There have been significant efficiency gains, and the vertical coordination had positive effects on farm investments and productivity, especially since the late 1990s. Evidence suggests that small dairy farms have generally benefited from the vertical coordination processes.

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File URL: http://www.econ.kuleuven.be/LICOS/DP/DP2006/DP165.pdf
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Paper provided by LICOS - Centre for Institutions and Economic Performance, K.U.Leuven in its series LICOS Discussion Papers with number 16506.

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Date of creation: 2006
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Handle: RePEc:lic:licosd:16506

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  1. Dries, Liesbeth & Swinnen, Johan F. M., 2004. "Foreign Direct Investment, Vertical Integration, and Local Suppliers: Evidence from the Polish Dairy Sector," World Development, Elsevier, vol. 32(9), pages 1525-1544, September. [Downloadable!] (restricted)
  2. Jean-Marie Codron & Zouhair Bouhsina & Fatiha Fort & Emilie Coudel & Aurélie Puech, 2004. "Supermarkets in Low-income Mediterranean Countries: Impacts on Horticulture Systems," Development Policy Review, Overseas Development Institute, vol. 22, pages 587-602, 09. [Downloadable!] (restricted)
  3. Peter Walkenhorst, 2001. "The Geography of Foreign Direct Investment in Poland's Food Industry," Journal of Agricultural Economics, Blackwell Publishing, vol. 52(3), pages 71-86. [Downloadable!] (restricted)
  4. Swinnen, Johan F.M. & Dries, Liesbeth & MacOurs, Karen, 2001. "Transition And Agricultural Labour," 2001 Annual meeting, August 5-8, Chicago, IL 20602, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
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  5. Liesbeth Dries & Thomas Reardon & Johan F. M. Swinnen, 2004. "The Rapid Rise of Supermarkets in Central and Eastern Europe: Implications for the Agrifood Sector and Rural Development," Development Policy Review, Overseas Development Institute, vol. 22, pages 525-556, 09. [Downloadable!] (restricted)
  6. Cungu, Azeta & Swinnen, Johan F M, 1999. "Albania's Radical Agrarian Reform," Economic Development and Cultural Change, University of Chicago Press, vol. 47(3), pages 605-19, April.
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  1. Hildegunn Ekroll Stokke, 2008. "Multinational supermarket chains in developing countries: Does local agriculture benefit," Working Paper Series 9408, Department of Economics, Norwegian University of Science and Technology. [Downloadable!]
  2. Swinnen, Johan F.M. & Vandeplas, Anneleen, 2007. "From Public to Private Governance of Agri-food Supply Chains in Transition Countries: Some Theoretical and Empirical Lessons," 104th Seminar, September 5-8, 2007, Budapest, Hungary 8521, European Association of Agricultural Economists. [Downloadable!]
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