Food Retailing and Consumer Food Prices in Slovenia

Abstract

This article focuses on agro-food chains and agro-food consumer prices in Slovenia considering its European Union (EU) membership. As the Slovenian agro-food markets were distorted prior to the EU accession with some agro-food prices that were greater than comparable EU prices, the empirical results confirm that with the EU membership Slovenian real agro-food consumer prices have largely adjusted downward. Besides policy changes, internalization of retailing and distribution chains by entries of supermarkets and hypermarkets have had impacts on market structures and rationalization of marketing activities. Supermarkets and hypermarkets are taking over a substantial proportion of retail trade in agro-food products with implications on increasing food chain efficiency by squeezing structures in consumer prices, as well as farmers, processors, and marketing margins for main agro-food staples. After the greater price adjustment changes that occurred by the EU membership, some stabilizations in agro-food markets is occurring, but at different levels of real consumer and producer prices and marketing margins. This implies that agro-food markets in the new EU member states are becoming much more integrated into internationally competitive markets, where pricing, sales promotion issues, and branding are taking an important role in the market segmentation of agro-food products.