Food supplies in a globalised economy The role of TNCs
Introduction – Food chain <ul><li>Small number of agribusinesses now dominate each part of the food chain in MEDCs. </li><...
Case study: Agricultural markets in the USA - Cargill <ul><li>Terminal grain handling facilities  – Cargill, ADM & General...
Global Scale <ul><li>3 companies control 90% of world coffee exporters - their turnovers are larger than the GNP of some c...
Cereal crops <ul><li>While farmers growing cereal crops ear, negative returns, breakfast cereal companies reap the profits...
Contaminated video – You Tube <ul><li>5 Agrochemical industries control the food market. They control everything from seed...
Extracts from Battle of the food chain article <ul><li>Manufacturers have gained the most, from the post war food settleme...
Battle of the food chain extracts continued <ul><li>Mergers & acquisitions have also occurred in the agrochemical industry...
Problems associated with agribusinesses <ul><li>Global operations give agribusinesses a political voice in many countries ...
Problems associated with agribusinesses 2 <ul><li>Destroyed traditional agricultural communities. </li></ul><ul><li>Underm...
Top six UK food retailers   Grocery market share, 12 weeks to March 30 2003.  1  Tesco  25.5% 2  Sainsbury's 17.4% 3  Asda...
Upcoming SlideShare
Loading in …5
×

Food Supplies In A Globalised Economy

1,436 views
1,306 views

Published on

Published in: Business, Technology
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,436
On SlideShare
0
From Embeds
0
Number of Embeds
15
Actions
Shares
0
Downloads
75
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Food Supplies In A Globalised Economy

  1. 1. Food supplies in a globalised economy The role of TNCs
  2. 2. Introduction – Food chain <ul><li>Small number of agribusinesses now dominate each part of the food chain in MEDCs. </li></ul><ul><li>Chemical companies that produce seeds are increasingly linked to grain traders & food processors in the production chain. </li></ul><ul><li>The same companies buy, ship & mill the grain and then feed it to the livestock or turn it into cereal. </li></ul><ul><li>Horizontal integration – When small no. of firms control a given market = increasing power & profits. </li></ul>
  3. 3. Case study: Agricultural markets in the USA - Cargill <ul><li>Terminal grain handling facilities – Cargill, ADM & General Mills. </li></ul><ul><li>Corn exporters – Cargill, ADM, Zen-Noh </li></ul><ul><li>Beef packers – Cargill, ConAgra, Tyson </li></ul><ul><li>Flour Mill facilities – AGM, ConAgra, Cargill, General Mills. </li></ul><ul><li>CARGILL – largest grain exporter; dominant in wheat, soya beans, corn & cotton; ranked in the top 10 for food & beverage; major player in beef packaging, ethanol & fertiliser production. </li></ul>
  4. 4. Global Scale <ul><li>3 companies control 90% of world coffee exporters - their turnovers are larger than the GNP of some countries. </li></ul><ul><li>Vertical integration – One company either owns or controls through joint ventures multiple stages of the production chain. For example, Dole – owns plantations, canning facilities and has the marketing power to bring pineapples from plantations in the Philippines to the whole world. </li></ul>
  5. 5. Cereal crops <ul><li>While farmers growing cereal crops ear, negative returns, breakfast cereal companies reap the profits. </li></ul><ul><li>Bushel of corn sold for $4 in 1989, while a bushel of corn flakes sold for $136. </li></ul><ul><li>In the same year cereal companies made 186 to 740 more profitable than the farms. </li></ul>
  6. 6. Contaminated video – You Tube <ul><li>5 Agrochemical industries control the food market. They control everything from seed to table. </li></ul><ul><li>Companies such as Monsanto have created seeds with traits, that are desirable to them. </li></ul><ul><li>They have created seeds resistant to a specific pesticide – their purpose to sell more of their own pesticide ‘Round up’. </li></ul><ul><li>They have also patented the seeds, so farmers are not allowed to save or develop them. </li></ul>
  7. 7. Extracts from Battle of the food chain article <ul><li>Manufacturers have gained the most, from the post war food settlement, of government subsidies. The subsidies ensured the manufactures had a secure supply of raw materials. </li></ul><ul><li>Nestlé – biggest food manufacturer - $46bn worth of food in 2001. This is largely due to mergers & acquisitions – Kit Kat & Rowntrees are now owned by Nestlé. </li></ul>
  8. 8. Battle of the food chain extracts continued <ul><li>Mergers & acquisitions have also occurred in the agrochemical industry, as these companies have moved into GM crops. </li></ul><ul><li>Similar situation in regards to supermarkets – Walmart owning Asda. </li></ul><ul><li>Retailers Vs Manufactuers. </li></ul><ul><li>Food industry lobby huge in Britain – Lord Sainsbury. </li></ul>
  9. 9. Problems associated with agribusinesses <ul><li>Global operations give agribusinesses a political voice in many countries – impose policies which reflect their own interests. </li></ul><ul><li>Allocate labour intensive problems to low wage economies & environmentally damaging processes, where environmental regulations are lenient. </li></ul><ul><li>Use high amount of pesticides & fertilisers, which contaminate water supplies. Production of one crop also leads to soil erosion & loss of biodiversity. </li></ul>
  10. 10. Problems associated with agribusinesses 2 <ul><li>Destroyed traditional agricultural communities. </li></ul><ul><li>Undermine long term sustainability in some parts of the world. </li></ul><ul><li>Many products grown in lEDCs are not aimed at the local needs but MEDC demands – food shortages. </li></ul><ul><li>Some promote GM crops </li></ul><ul><li>Dumping. </li></ul>
  11. 11. Top six UK food retailers Grocery market share, 12 weeks to March 30 2003. 1 Tesco 25.5% 2 Sainsbury's 17.4% 3 Asda 15.8% (Source: Taylor Nelson Sofres) Top 10 global food retaliers Global sales in Euros, 2002. 1 Wal-Mart (US) 199bn 2 Carrefour (Europe) 86bn (Source: Cap Gemini Ernst & Young) Top 10 global food manufacturers Total food sales in US$, 2001-2002. 1 Nestlé 46.6bn 2 Philip Morris (Kraft) 38.1bn 3 ConAgra 27.6bn 4 Unilever 26.7bn 5 PepsiCo 25.1bn 6 ADM (corn milling) 23.5bn 7 Tyson (meat processing) 23.4bn 8 Cargill 21.5bn 9 Coca-Cola 20.1bn 10 Mars 15.3bn

×