Acta Univ. Agric. Silvic. Mendelianae Brun. 2015, 63, 1825-1838

https://doi.org/10.11118/actaun201563061825
Published online 2015-12-26

European Sugar Market – Impact of Quota System

Irena Benešová1, Helena Řezbová1, Luboš Smutka1, Karel Tomšík1, Adriana Laputková2

1Department of Economics, Faculty of Economics and Managment, Czech University of Life Sciences in Prague, Kamýcká 129, 165 21 Praha 6-Suchdol, Czech Republic
2Department of Languages, Faculty of Economics and Managment, Czech University of Life Sciences in Prague, Kamýcká 129, 165 21 Praha 6-Suchdol, Czech Republic

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.

Funding

This paper was supported by the Grant Agency at the Faculty of Economics and Management, Czech University of Life Sciences Prague: Analysis of the sugar sector after abolition of the Common Market Organization [nr. 20141045].

References

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