Food industry structure in Norway and Denmark since the 1990s. Path dependence and institutional trajectories in Nordic food markets

Abstract

The structure of the food industry and industrial patterns along agri-food chains are continuously under development. Structural development of food industries refers to issues such as concentration, internationalisation, technological specialisation or vertical integration and covers the whole agri-food chain. The thesis contributes to the analysis of such transformations. Regarding the 1990s as a turning point, the thesis compares Norwegian and Danish agri-food industries as two cases of structural development. The two countries responded differently to the 1990s transformations. This also affected industry structure. Norway is connected to the EU single market via the EEA agreement, while Denmark is a full member of the EU. The thesis applies historical and institutionalist perspetives in the reconstruction of structural development since the 1990s. The main empirical substance of the study is an analysis of mergers and acquisitions (M&A) in both industries. M&As directly contribute to the above mentioned parameters of structural development. The strategic situation of M&As (micro-level) in both countries is used to identify strategic drivers of sectoral changes (meso-level), and these are again analysed in a national political economy context (macro-level). The analysis is integrated into a comparative political economy framework specified for the agri-food industries. Structural developments are traced as path dependent institutional trajectories in both countries since the 1990s. The two national political economies are outlined on the basis of a ‘varieties of capitalism’ framework. Karl Polanyi’s understanding of labour, capital and natural resources as three fictitious commodities serve to identify core areas of institutional regulation. His theory of capitalist double movements provides the basis for an understanding of institutional change in capitalist market economies. As for research design, the study applies a case study and qualitative interview methodology. Both are specified for the meso- and macro-level. Theory development in the thesis relates to the ‘middle-range’ and the grounded theory tradition, rejecting high level notions of social theory. Data accumulated through expert interviews in both countries are combined with secondary macro-data. The use of such different sources enables the study to trace structural development of two industrial sectors at the meso- and macro-level, using new primary material from interviews. Core categories – in the grounded theory sense – have been developed to characterize market dynamics, that again frame contribute to explain structural development. The following three categories characterizes the Norwegian case: structural national growth barriers, connection-disconnection to the EU market, and an insulated form for concentration. As for the Danish case, the main category identified is that of full international integration with both international expansion and world market competition on the domestic market. These are mediating categories developed through institutional contextualisation of both political economies. Research findings identify a breaking point in Norway’s path of agri-industrial development since the 1990s and a continuous path of export dependent industrialisation in Denmark. Norway is still able to sustain food production in a relatively protected setting; while Denmark’s extensive global integration goes hand in hand with a detachment from the local rural roots of agricultural production. The latter transformation is also a developmental breaking point.