Economic Relations in European Food Chains

The study presents an analysis of factors influencing the selection, strengthening and consolidation of good economic relations in the European food chains. Four basic types of economic relations have been established, taking the form of transactions and type of management as the main criteria. These include: spot markets, repeated market transactions with the same supplier-recipient, formal written contracts and financial participation. Empirical material has been gathered in the form of questionnaires in 13 European food chains located in 6 EU Member States: Germany, Ireland, Great Britain, Finland, Spain and Poland. Among the examined States, formal relations are most common in Finland and Spain; least common: between farmers-processing plants in Ireland. Among the examined food chains most formalised relations are in the beer chain (mainly between processing plants and retail sellers) and pork chain (farmer-processing plant). Chains involving bakery and beef show significantly lower level of formalised relations. The results of the study indicate that the main factors determining the quality of relations between the participants of examined food chains are: good communication, personal connections and even distribution of competitive power between business partners of the chain. Also the dependence of quality and sustainability of economic relations on the type of product, country and location of the partners in the chain (level) has been identified. No significant dependence of the nature of economic relations against the type of business connection and level of their formalisation has been identified