Food Industry <br />Economics

Food Industry
Economics

ISSN Print: 2312-847X
ISSN Online:2411-4111
ISO: 26324:2012


Integration mechanisms of development of ukrainian market of bread and bakery products

Nikishina O.; Bibikova N.

Key words: bread market; legal and «shadow» segments; integration tendencies; intersector linkages; market integration mechanisms.

Page: 16-27

Abstract

Ukrainian bread and bakery market is a four-sector strategic market, which performs an integration function in a macrosystem. The characteristic feature of the modern bread market is functioning of two segments: legal, which provides 26 % of the real volume of consumption of bread, and «shadow», which share reaches 74 % and is growing dynamically.
During the study, the integration tendencies and problems of development of bread market in the segmented section have been determined. It is established that the legal segment is competitive, among the large enterprises vertically integrated structures with a closed production cycle prevail. For the segment there is a tendency for unbundling, decrease in the number of enterprises, level of loading of their capacities (30-40 %) and volumes of production. The main problems of development of official bread producers are: (1) a fierce competition with the «shadow» segment; (2) a low level of profitability of products (about 4 %); (3) unequal relations with trade networks. The «shadow» segment of the bread market is competitive and dynamically growing. It is characterized by the strengthening of integration ties between «shadow» producers of flour and bread. The main problem of development is the problem of quality and safety of bread products sold at dumping prices.
The integration problems and development mechanisms of Ukrainian market of bread and bakery products have been substantiated. The main problems of integration include the following: (1) weakening of integration linkages between rye and wheat producers of grade 2 and processing enterprises; (2) unequal economic relations between the subjects of the production and trade sectors; (3) growth in volumes of the «shadow» segment of the bread market. For their target solutions three integration mechanisms have been developed providing for: (1) creation of grain cooperatives with participation of small and medium grain producers and processing enterprises; (2) adoption of Law of Ukraine «On Internal Trade», which defines the terms of trade networks calculations for the group of socially important food products (up to 10 business days); (3) strengthening of market surveillance system taking into account European experience. According to the analysis the price disparity in consumer sector has been revealed and expediency of introduction of the mechanism of food subsidies for low-income groups of population has been substantiated.


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DOI: 10.15673/fie.v10i1.862

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