The effects of concentration in food retail sector on food industry firms (small and medium enterprises): New institutional economics approach

In this study, the effects of concentration in food retail sector on food industry firms (small and medium scale enterprises) is analyzed in the frame of new institutional economics (NIE) approach. Topics on new institutional economics, transaction costs, contract theory, property rights, and principal-agent theory are mentioned in the first chapter of the study. In the second chapter, reconstruction process in food retail sector in Turkey, debate on legal regulation about the sector, and actual structure of the global food retail sector are taken up. In the last chapter, some findings obtained from the survey applied to some food industry firms selling goods to chain markets in Antalya, Afyon and Mersin cities are placed in order to see concentration effects on food retail sector. Also, retailer-industrialist relationship is discussed in the frame of NIE (transaction costs and contracts). Finally, it is concluded that an increase in concentration rate of big markets chain in food retail sector and an increase in vertical integration caused by transaction costs will affect providers and small and medium scale enterprises negatively.