Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Retail-farm price margins growing rapidly in Finland

22.11.2005


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:
http://www.mtt.fi
http://www.mtt.fi/english/press/pressrelease.html

More articles from Business and Finance:

nachricht Corporate coworking as a driver of innovation
22.11.2017 | Fraunhofer-Institut für Arbeitswirtschaft und Organisation IAO

nachricht Mathematical confirmation: Rewiring financial networks reduces systemic risk
22.06.2017 | International Institute for Applied Systems Analysis (IIASA)

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: Scientists decipher key principle behind reaction of metalloenzymes

So-called pre-distorted states accelerate photochemical reactions too

What enables electrons to be transferred swiftly, for example during photosynthesis? An interdisciplinary team of researchers has worked out the details of how...

Im Focus: The first precise measurement of a single molecule's effective charge

For the first time, scientists have precisely measured the effective electrical charge of a single molecule in solution. This fundamental insight of an SNSF Professor could also pave the way for future medical diagnostics.

Electrical charge is one of the key properties that allows molecules to interact. Life itself depends on this phenomenon: many biological processes involve...

Im Focus: Paradigm shift in Paris: Encouraging an holistic view of laser machining

At the JEC World Composite Show in Paris in March 2018, the Fraunhofer Institute for Laser Technology ILT will be focusing on the latest trends and innovations in laser machining of composites. Among other things, researchers at the booth shared with the Aachen Center for Integrative Lightweight Production (AZL) will demonstrate how lasers can be used for joining, structuring, cutting and drilling composite materials.

No other industry has attracted as much public attention to composite materials as the automotive industry, which along with the aerospace industry is a driver...

Im Focus: Room-temperature multiferroic thin films and their properties

Scientists at Tokyo Institute of Technology (Tokyo Tech) and Tohoku University have developed high-quality GFO epitaxial films and systematically investigated their ferroelectric and ferromagnetic properties. They also demonstrated the room-temperature magnetocapacitance effects of these GFO thin films.

Multiferroic materials show magnetically driven ferroelectricity. They are attracting increasing attention because of their fascinating properties such as...

Im Focus: A thermometer for the oceans

Measurement of noble gases in Antarctic ice cores

The oceans are the largest global heat reservoir. As a result of man-made global warming, the temperature in the global climate system increases; around 90% of...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

10th International Symposium: “Advanced Battery Power – Kraftwerk Batterie” Münster, 10-11 April 2018

08.01.2018 | Event News

See, understand and experience the work of the future

11.12.2017 | Event News

Innovative strategies to tackle parasitic worms

08.12.2017 | Event News

 
Latest News

Gran Chaco: Biodiversity at High Risk

17.01.2018 | Ecology, The Environment and Conservation

Only an atom thick: Physicists succeed in measuring mechanical properties of 2D monolayer materials

17.01.2018 | Physics and Astronomy

Fraunhofer HHI receives AIS Technology Innovation Award 2018 for 3D Human Body Reconstruction

17.01.2018 | Awards Funding

VideoLinks
B2B-VideoLinks
More VideoLinks >>>