Economic(un)sustainability in food supply chains – an analysis of large retailers’markups in Croatia<b> </b>

The concept of corporate responsibility deals not only with environmental and social sustainability, but also with specific ethical issues of socio-economic sustainability. In this paper, we analyse the causes and the negative effects of unfair trade practises in food supply chains, which have a direct impact on the current inflationary trends. The food supply chains are a relevant source of recent inflationary trends in most countries. Therefore, we develop a case study model to detect the sources of inflation and the unsustainable market relationships between two most significant participants in food supply chains: 1) the small food producer and 2) large retailers. We examined the possible existence, nature and direction of unfair relationships between a small producer and large retailers that have inflationary consequences. The study analyses the relationship between the markups of large retailers and the final retail price for consumers compared to the prices of a small producer on a small market with high retail concentration (Croatia). The analysis of the product price structure in recent inflationary periods has shown that the small producer is in an unfair relationship with large retailers who, due to their size, impose a market model in which small producers and end consumers are negatively impacted, while large retailers add value to their markup and the final retail price of the product. These negative trends in food supply came into focus in 2022 and caught the attention of national legislators attempting to address this issue.