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Identification of Lithuanian International Trade Risk in Beverages

Author

Listed:
  • Baranauskaite Lina

    (Institute of Economics and Rural Development of Lithuanian Centre for Social Sciences, Vilnius, Lithuania)

  • Jurevicienė Daiva

    (Vilnius Gediminas Technical University, Vilnius, Lithuania)

Abstract

Research purpose. The article aims to identify the risk groups arising in foreign trade in the four main groups of processed beverages at a national level. Design / Methodology / Approach. Processed agricultural drinks do not fall into the category of essential food. The article examines four main drink groups: waters (including mineral waters and aerated waters, with additive), beer, wine, and other alcoholic (e.g., spirits, liqueurs, whiskies, rums, gins, vodkas, etc.) beverages. The case of Lithuania is presented. Analysis and assumption of scientific literature and TOPSIS method are used. The study does not aim to assess all risk factors but to identify the groups of risk factors and to rank them according to their importance for each processed beverage sectors supply chains. Findings. Based on the scientific literature analysis, the eight risk groups were identified and were evaluated according to their importance for the beverages supply chain. Experts ranked risk groups taking into account their importance for international processed beverages trade for each product group. The results show that the most important is the Demand risks group for all processed beverages, and the least important is Political risk. The significance of other risk groups for a particular beverage supply chains differs. Supply risks were second in the ‘water with add’ group, while in the ‘other alcohol’ group, it is in fourth place. For the ‘other alcohol’ group, supply risks are less significant. Production risks are one of the most important in the wine trade. Financial risks are one of the most important in the ‘other alcohol’ group. Management and operational risks play an essential role in the beer supply chains. The least significant is three risk groups: Logistical and infrastructural risks, Policy and regulatory risks, Political risks. Originality / Value / Practical implications. The identified risks groups in the four main groups of processed beverages can help shape the country’s trade policy, mitigate trade risks, and effectively manage the agricultural trade beverage subsector. Research results can be practically used both for government or business decisions and for the public sector (trade associations).

Suggested Citation

  • Baranauskaite Lina & Jurevicienė Daiva, 2021. "Identification of Lithuanian International Trade Risk in Beverages," Economics and Culture, Sciendo, vol. 18(1), pages 100-112, June.
    • Handle: RePEc:vrs:ecocul:v:18:y:2021:i:1:p:100-112:n:1
    DOI: 10.2478/jec-2021-0008
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    References listed on IDEAS

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    1. Gervais, Antoine, 2018. "Uncertainty, risk aversion and international trade," Journal of International Economics, Elsevier, vol. 115(C), pages 145-158.
    2. Binod Khanal & Rigoberto A. Lopez & Azzeddine Azzam, 2020. "Testing local bias in food consumption: The case of fluid milk," Agribusiness, John Wiley & Sons, Ltd., vol. 36(2), pages 339-344, April.
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    4. Joao Montalvao & Patricia Van de Velde, 2020. "COVID-19 and Food Security," World Bank Publications - Reports 33813, The World Bank Group.
    5. Khanal, Binod & Lopez, Rigoberto A. & Azzam, Azzeddine M., 2018. "Local Bias in Fluid Milk Consumption," 2018 Annual Meeting, August 5-7, Washington, D.C. 274142, Agricultural and Applied Economics Association.
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    More about this item

    Keywords

    International trade; Beverages trade; Foreign trade risk; Risk identification; TOPSIS;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
    • N5 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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