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Sugar oligopoly in Poland – determinants of change and functioning

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  • Szajner, Piotr
  • Hryszko, Krzysztof

Abstract

The sugar industry is a strategic part of the Polish agri-food sector, as sugar is the basic sweetener used in industrial food production and in households. The sugar industry is a classic oligopoly, as four corporations produce a homogeneous product, which is chemically pure sucrose. Oligopoly is a form of imperfect market competition, the theoretical foundations of which have been thoroughly described in microeconomic literature. Structural and ownership transformations in the sugar industry began in 1994 on the basis of statutory regulations. Direct foreign investments by transnational corporations have influenced the structure of the industry, and their share in the domestic market has increased to approx. 60%. The EU market regulation system has determined the conditions of competition and the economic strategy of sugar corporations. The production potential of the industry exceeds the demand of the domestic market, as the share of exports in revenues has increased from 10 to approx. 30%. As a result, the domestic market is strongly integrated with the EU and world markets. The processes of ownership, structural and modernization changes were successful, as the sugar industry gained a lasting ability to generate financial surpluses and satisfactory economic indicators. In the years 2009–2022, net profit ranged between PLN 0.2–1.7 billion per year, and its high variability was primarily determined by the supply and demand situation on the global market. Domestic factors, i.e. the level of production and stable demand, had a much smaller impact on the market.

Suggested Citation

  • Szajner, Piotr & Hryszko, Krzysztof, 2024. "Sugar oligopoly in Poland – determinants of change and functioning," International Journal of Agricultural Sciences and Technology (IJAGST), SvedbergOpen, vol. 201(4), February.
  • Handle: RePEc:ags:ijag24:344913
    DOI: 10.22004/ag.econ.344913
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    References listed on IDEAS

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