European Sugar Market - Impact of Quota System

Irena Benešová, Helena Řezbová, Lubos Smutka, Karel Tomšík and Adriana Laputková
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Irena Benešová: Department of Economics, Faculty of Economics and Managment, Czech University of Life Sciences in Prague, Kamýcká 129, 165 21 Praha 6-Suchdol, Czech Republic
Helena Řezbová: Department of Economics, Faculty of Economics and Managment, Czech University of Life Sciences in Prague, Kamýcká 129, 165 21 Praha 6-Suchdol, Czech Republic
Karel Tomšík: Department of Economics, Faculty of Economics and Managment, Czech University of Life Sciences in Prague, Kamýcká 129, 165 21 Praha 6-Suchdol, Czech Republic
Adriana Laputková: Department of Languages, Faculty of Economics and Managment, Czech University of Life Sciences in Prague, Kamýcká 129, 165 21 Praha 6-Suchdol, Czech Republic

Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 2015, vol. 63, issue 6, 1825-1838

Abstract: The European agricultural market has been criticized for its heavy regulations and subsidization. The sugar market is one of the most regulated ones; however, this will change radically in 2017 when the current system of production quotas will end. The aim of this paper is to present the basic characteristics of the EU quota sugar market. The analysis identifies the main drivers of EU sugar market and their position within the EU sugar market. The paper identifies especially those drivers/companies/alliances which take control over the EU sugar production realized under the quota production system. The paper also highlights the level of EU sugar market concentration and also identifies those countries and companies which are the main leaders in the sugar production area realized under the quota system. Based on the results deriving from the paper, it is possible to characterize the EU sugar market as a heavily concentrated one - nearly 75% (10 mil. tonnes) of the quota is controlled by five multinational companies only; these companies are operating more than 50% of all the available sugar plants located in the EU. These multinational alliances are also in control of the production capacities of their subsidiaries. In most countries, this causes serious problems as the given quota is controlled by one or two producers only. The EU sugar market is extremely concentrated especially if we take into consideration the location of each alliance's headquarters. The majority of production capacities are under (the) control of especially German and French companies. These two countries are also the main beneficiaries in relation to the EU sugar production quota system.

Keywords: sugar market; production quota; sugar; concentration; market leaders; profile; restructuralization (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:mup:actaun:actaun_2015063061825

DOI: 10.11118/actaun201563061825

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