Relationships Between Food Processors and Traders in Hungary

During the past years the market share of trade chains has increased substantially in Hungarian food commerce. The concentration of food commerce and the increasing presence of international and national trade chains can be observed in Hungary as well. It is generally true that small and middle-sized food trading enterprises are not competitive compared to large trade chains. However, this fact does not mean that their reason for existence or their support is questionable. The former system of relations between food commerce and food industry has undergone radical changes due to the expansion of food chains. Due to the changes, requirements towards food industry have grown, food industry has to face fundamentally new mentality and concepts. In conclusion we can state that during the many-year presence of trade chains (multinational and Hungarian) food industry has tried to adapt to the transformed competition conditions even so far, and this process is going on. In addition to the fact that producers have to experience fundamental changes in mentality, economic policy has to provide this progress with the necessary background. A system of subsidies and regulations has to be established with the aim to prevent serious distortions by the expansion of trade chains. Economic policy has numerous known and yet unknown tasks in moderating the vulnerability of small and medium-sized enterprises against increasingly concentrating trade chains of large capital power.