Do food scares explain supplier concentration? An analysis of EU agri-food imports

Abstract

This paper documents a decreasing trend in the geographical concentration of EU agrofood imports. Decomposing the concentration indices into intensive and extensive margins components, we find that the decrease in overall concentration indices results from two diverging trends: the pattern of trade diversifies at the extensive margin (EU countries have been sourcing their agri-food products from a wider range of suppliers), while geographical concentration increases at the intensive-margin (EU countries have concentrated their imports on a few major suppliers). This leads to an increasing inequality in market shares between a small group of large suppliers and a majority of small suppliers. We then move on to exploit a database of food alerts at the EU border that had never been exploited before. After coding it into HS8 categories, we regress the incidence of food alerts by product on determinants including exporter dummies as well as HS8 product dummies. Coefficients on product dummies provide unbiased estimates of the intrinsic vulnerability of exported products to food alerts, as measured at the EU border. We incorporate the product risk coefficient as an explanatory variable in a regression of geographical concentration and show that concentration is higher for risky products.

Sanitary and Phytosanitary measures in agri-food imports from the European Union: Reputation effects over time

“…Therefore, in the present study the number of notifications includes all types of notifications. This choice also relies on previous studies carried out by several authors (Kleter et al, 2009;Jaud et al, 2013;Kallummal et al, 2013;Jouanjean et al, 2012Jouanjean et al, , 2015. These authors use notifications as dependent variable to determine the impact of SPS measures on agro-food trade.…”

“…Food safety standards in the EU are therefore becoming more stringent in order to limit the risks associated with contaminated food products. Sanitary concerns are more relevant for products like fruits and vegetables or fisheries products (Jaud et al, 2013). Indeed, consumer health has become a key concern in EU public health policies, a fact which in turn could influence the EU's preferences in supplier selection (Taghouti et al, 2015).…”

“…In particular, Kleter et al (2009) explored the usefulness of RASFF notifications to identify emerging trends in recent food safety issues, based on EU reports. For their part, Jaud et al (2013) examined the RASFF notifications of 146 exporters to the EU in order to determine the geographical concentration of EU agri-food imports; and Kallummal et al (2013) used the RASFF database to analyze the impact of EU food safety measures on trade flows between South Asian countries and the EU as a whole.…”

Factores determinantes de las Medidas No Arancelarias aplicadas al comercio agroalimentario

“…As for exporters in the present study, we acknowledge that there might be an import concentration on a limited number of non-EU exporters for products that present higher risks, as noted by Jaud et al (2013). To avoid the selection bias related to this fact, we selected exporters by noting their share in total world exports.…”

“…Kleter et al (2009) analyzed chronological trends for product and hazard categories, regions of origin and notifying countries, putting observed trends into perspective. Jaud et al (2013) linked food risks to supplier concentration in the EU market, considering the EU as a single import unit.…”