Dependency in Manufacturer-Retailer Relationships: The Potential Implications of Retail Internationalisation for Indigenous Food Manufacturers

Abstract

This paper explores the sets of trading relationships and interdependencies that existed between British and Irish food retailers and the Irish food manufacturing sector prior to Tesco Stores acquisition of Power Supermarkets in 1997. Power Supermarkets was at that time the largest grocer in Ireland. The paper examines the role played by Irish and British retailers in the development of the Irish food manufacturing sector. It points to some of the ways in which retail internationalisation and growing retail concentration are likely to affect food manufacturers and the sets of power and dependency relationships that exist along the food chain. It demonstrates that the effect of internationalisation is likely to be asymmetric with small and emerging firms more likely to experience adverse consequences. The impact upon manufacturers' brand portfolio and customer portfolio strategies are also highlighted.