Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:


Retail-farm price margins growing rapidly in Finland


The share of the wholesale and retail trade in the consumer price of food has increased rapidly in Finland over the past five years. At the same time, a declining share of the consumer food euro is allocated to farmers, according to marketing margin calculations from MTT Agrifood Research Finland.

Marketing margin calculations by MTT indicate the share of the retail price going to each sector along the supply chain: farmer, processing and trade (=marketing margin) as well as government taxes. The new figures for the period 1999-2004 reveal considerable growth in both unit and percentage marketing margins for many basic food products.

For the most part, the growth in these margins has been progressive. Average percentage margins for meat have grown the fastest. For dairy and grain products, a slightly slower growth is indicated.

Farmers in Finland, in turn, have been receiving an increasingly lower proportion of the retail price of food. The farmer’s share in the price of minced meat, for example, has declined from 33.6 per cent in 1999 to just over 23 per cent in 2004. The farmer’s share for pork chops have declined from 19.4 per cent to less than 15 per cent over the past five years.

Rising marketing margins and a declining share for the farmer have come during a period of considerable change in the structure of both the retail and wholesale sectors. The concentration of the retail sector, with fewer outlets and the growth of the large supermarket chains, has been particularly rapid in Finland. The two leading retail chains of food and daily goods increased their market share from 55 per cent in 1990 to nearly 80 per cent by 2005. The increased concentration of retail power means that large retail outlets now exert significantly more control over others in the food supply chain.

“The Finnish food sector is not alone in witnessing a growth in retail margins. This phenomenon appears to be happening across other EU markets where falling farm gate prices don’t always lead to the fall in retail prices, which increases retail margins.” says Jyrki Niemi, an agricultural economist at MTT.

“This reflects the increased market power of the retail sector, although some other factors, including more value-added at the retail level, including better service and a greater variety, play a certain role as well. There is also evidence of retail price levelling - especially for meat products. Levelling occurs where short-run fluctuations in producer prices are filtered out so as to hold retail prices stable.”

Marjatta Sihvonen | alfa
Further information:

More articles from Business and Finance:

nachricht The RWI/ISL-Container Throughput Index started off well in 2018
22.02.2018 | RWI – Leibniz-Institut für Wirtschaftsforschung

nachricht RWI/ISL-Container Throughput Index ending 2017 on a positive note
24.01.2018 | RWI – Leibniz-Institut für Wirtschaftsforschung

All articles from Business and Finance >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Tiny implants for cells are functional in vivo

For the first time, an interdisciplinary team from the University of Basel has succeeded in integrating artificial organelles into the cells of live zebrafish embryos. This innovative approach using artificial organelles as cellular implants offers new potential in treating a range of diseases, as the authors report in an article published in Nature Communications.

In the cells of higher organisms, organelles such as the nucleus or mitochondria perform a range of complex functions necessary for life. In the networks of...

Im Focus: Locomotion control with photopigments

Researchers from Göttingen University discover additional function of opsins

Animal photoreceptors capture light with photopigments. Researchers from the University of Göttingen have now discovered that these photopigments fulfill an...

Im Focus: Surveying the Arctic: Tracking down carbon particles

Researchers embark on aerial campaign over Northeast Greenland

On 15 March, the AWI research aeroplane Polar 5 will depart for Greenland. Concentrating on the furthest northeast region of the island, an international team...

Im Focus: Unique Insights into the Antarctic Ice Shelf System

Data collected on ocean-ice interactions in the little-researched regions of the far south

The world’s second-largest ice shelf was the destination for a Polarstern expedition that ended in Punta Arenas, Chile on 14th March 2018. Oceanographers from...

Im Focus: ILA 2018: Laser alternative to hexavalent chromium coating

At the 2018 ILA Berlin Air Show from April 25–29, the Fraunhofer Institute for Laser Technology ILT is showcasing extreme high-speed Laser Material Deposition (EHLA): A video documents how for metal components that are highly loaded, EHLA has already proved itself as an alternative to hard chrome plating, which is now allowed only under special conditions.

When the EU restricted the use of hexavalent chromium compounds to special applications requiring authorization, the move prompted a rethink in the surface...

All Focus news of the innovation-report >>>



Industry & Economy
Event News

Virtual reality conference comes to Reutlingen

19.03.2018 | Event News

Ultrafast Wireless and Chip Design at the DATE Conference in Dresden

16.03.2018 | Event News

International Tinnitus Conference of the Tinnitus Research Initiative in Regensburg

13.03.2018 | Event News

Latest News

A new kind of quantum bits in two dimensions

19.03.2018 | Physics and Astronomy

Scientists have a new way to gauge the growth of nanowires

19.03.2018 | Materials Sciences

Virtual reality conference comes to Reutlingen

19.03.2018 | Event News

Science & Research
Overview of more VideoLinks >>>