Food waste due to retail power in supply chains: Evidence from Sweden

Abstract

Trading practices such as the take-back agreement (TBA) can become a tool for retailers to exert coercive power over suppliers when market concentration is high. We explore the implications of TBAs for the Swedish bread industry using unique company data from a premium bread supplier and find that powerful buyers over-order and, thereby, waste. This supplier faced 30% returns on total volume produced in the period 2011-2015 and had to bear the entire cost of bread rejections, collection and disposal. It received payment only for bread sold to end-customers, not the quantity supplied. To our knowledge, this is first time there is substantial evidence of the negative consequences such trading practices lead to with respect to waste. The EU has been considering banning the practices of 'forcing the supplier to pay for wasted product' and 'a buyer returning unsold food products to the supplier'. However, such behaviour is very difficult to prove, given that suppliers-buyers are either tied up with bilateral confidential contracts or operate under relational norms. Yet, TBAs are common in certain food supply chains, presenting a global challenge for prevention of food waste and requiring deeper policy engagement.

Keywords

Food supply chain; Take-back agreement; Coercive power; Food waste

Published in

Global Food Security
2019, Volume: 20, pages: 1-8

SLU Authors

• Eriksson, Mattias

  • Department of Energy and Technology, Swedish University of Agricultural Sciences
    

Associated SLU-program

Food Waste


Sustainable Development Goals

SDG2 Zero hunger
SDG12 Responsible consumption and production


UKÄ Subject classification

Economics
Environmental Sciences


Publication identifier

DOI: https://doi.org/10.1016/j.gfs.2018.10.002

Permanent link to this page (URI)

https://res.slu.se/id/publ/97074