Pass-through of Unfair Trading Practices in EU food supply chains

The goal of the research project is to develop and test a monitoring tool to assess occurrence, impact and pass-through effects of Unfair Trade Practices (UTPs). The project addresses the methodological problems underlying the empirical analysis, devises an empirical strategy for the measurement of UTPs and proposes an application to the fruit and vegetable sector in Italy, Germany and Slovakia. Our proposal is an application of Process-Tracing technique to the empirical investigation of UTP occurrence, impact and pass-through effect. We represent the passthrough effect as a diffusion process along the supply chains. The process starts from focus transactions, i.e., transactions where a strong unbalance in the parties’ bargaining power determines the first occurrence of UTPs. The UTP exerts pressure on the weak firm, which must adjust their business organization and the way it interacts with other firms. Such adjustment may determine subsequent adjustments along the supply chain. We define the pass-through effect as the sequence of adjustments along the supply chain due to the adoption of a UTP in a focus transaction.