Introduction to symposium on the changing role of supermarkets in global supply chains: from seedling to supermarket: ag
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Introduction to symposium on the changing role of supermarkets in global supply chains: from seedling to supermarket: agri-food supply chains in transition David Burch • Jane Dixon • Geoffrey Lawrence
Accepted: 9 November 2012 / Published online: 21 November 2012 Springer Science+Business Media Dordrecht 2012
Introduction In the mid-1970s there was a widespread view that the full vertical integration of agriculture was occurring, with food production, distribution, and retailing coming to be organized on a global scale by the major food manufacturers such as Nestle, Heinz and Unilever. One large US conglomerate, Tenneco, claimed it would own and control all of its agri-food operations from ‘seedling to supermarket’ (Anonymous 1975). The prospect of such a level of corporate control over the food industry created academic debate about: industry profiteering; the implications for consumer sovereignty of food industry mergers and acquisitions; the future role of the ‘family farmer’; and, the impacts on rural communities, consumers, and the environment (Bonanno et al. 1994; Heffernan et al. 1999; for Australia, see Burch and Lawrence 2005; Burch et al. 1996; Lawrence 1987; Lockie and Pritchard 2001). However, while the horizontal and vertical integration of agri-food industries has occurred, it is not the food manufacturers but the global supermarkets, fast-food outlets, and other large food retailers, which have come to exercise control through the organization and management of the agri-food supply chain. According to Lang and Heasman (2004) such control was being exercised D. Burch G. Lawrence School of Social Science, The University of Queensland, Brisbane 4072, Australia e-mail: [email protected] G. Lawrence e-mail: [email protected] J. Dixon (&) Australian National University, Building 62, Mills Road, Canberra 0200, Australia e-mail: [email protected]
‘by no more than a handful’ of corporations. In 2004 in the UK, for example, four firms controlled 75 % of all sales in the supermarket sector while in Australia, the top three chains controlled 80 % of grocery sales and some 60 % of the fresh food market. This figure has barely changed in the last 8 years in Australia despite the entry of German retailer Aldi and the expansion of the IGA network of supermarkets. In Sweden, the Netherlands and France the top three retail food firms held, respectively, 95, 83 and 64 % of the market (Lang et al. 2009). In the US, large retailers like Walmart have a major influence on the way food is grown, processed and delivered to consumers. They deal with only the largest suppliers, bypassing those too small to produce in bulk. Through their negotiating power, the food retailers have undercut those in the wholesale industry, with wholesalers responding by taking food manufacturing offshore to areas of cheaper labour, in the hope of having a product internationally-competitive enough to supply the retailers (Carolan 2012). This restructuring of the agri-food supply chain has had far-reaching effects on all the actors in
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