Price transmission along the food supply chain in the European Union
Agricultural commodities and consumer food prices have experienced strong variations over the last 2 years, both upwards and downwards. This increased volatility, combined with long-term prospects of rising food prices, highlights the necessity to increase the efficiency of the food supply chain to ensure consumer food prices reflect the evolution of inputs prices. This paper aims at better understanding price transmission mechanisms along the chain across European Union Member States. Significant differences across Member States in magnitude of pass-through of agricultural commodity prices variations to consumer prices, as well as price transmission asymmetries, suggest potential market fragmentation within the EU. Country-specific regulatory frameworks, as well as discrepancies in competition intensity and competitive practices along the chain can impact price transmission significantly. In particular, differences in bargaining power between suppliers and retailers for selected food products have been identified as sources of cross-country discrepancies in price transmission.
|Date of creation:||2009|
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