Sustainable Concentration in the Polish Food Industry in the Context of the EU-MERCOSUR Trade Agreement

Abstract

Concentration within the food industry is a desirable process in the context of improving economic efficiency, which is the basis for building sustainable competitive advantages in internationalisation and globalisation. Excessive concentration of market structures can generate negative externalities that threaten sustainability in the long term. Maintaining a balance between the freedom of economic activities and the protection of consumers and environmental interests is fundamental to the stability of the entire economy and its position in the international market, which is a priority of the EU-MERCOSUR trade agreement. The aim of this article was to assess the process of concentration of the Polish food industry and its impact on factor efficiency in the context of changing external conditions. In order to do so, the Cobb–Douglas production function was used. The research results showed that there is a progressive concentration in the food industry. Changes in the entity structure are taking place in an evolutionary way, as illustrated by the still high fragmentation of companies. Large companies make good use of economies of scale, which is mirrored in their high efficiency. The structure of the Polish food industry makes it possible to realise the objectives of agricultural policy, including in terms of sustainable development and improvement of competitiveness on the global market. Taking into account the current entity structure of the Polish food industry, it will be crucial for the long-term sustainability to take into account contemporary economic, environmental and social issues in the EU-MERCOSUR trade agreement.