Strategic Alliances in the European Food Industry

Abstract

The EC food industry is characterized by a fragmented manufacturing sector of over 100,000 companies. The heterogeneous nature of food demand and the predominance of family‐owned companies servicing specialized local needs has hindered the growth of the major food manufacturers, while the influence of the food multiples has grown unabated. An analysis of the forces for change in the European food industry leads to the conclusion that partnerships and alliances will increase rapidly throughout Europe. Vertical co‐ordination will be driven by such factors as: food safety legislation; growing consumer concern over how, where and by whom food products are produced; and incentives for all parties to squeeze costs in the supply chain to gain additional margin and enhanced competitiveness. Horizontal alliances will continue to develop as retailers seek to maintain their strength in the market, manufacturers attempt to minimize the risks associated with entering new markets, and farmers (co‐operatives) look to add value to their produce and improve marketing management.

Citation

Fearne, A. (1994), "Strategic Alliances in the European Food Industry", European Business Review, Vol. 94 No. 4, pp. 30-36. https://doi.org/10.1108/09555349410063808