European Sugar Market - Quo Vadis?

Recent years have witnessed significant changes in the European sugar market. An effort on the part of the European Commission has brought significant changes. During the last two decades these changes have been applied to all member states and third countries as well. The ownership structure has changed substantially. This also has an impact on market concentration and production capacities. This paper deals with one aspect of the sugar market - sugar quotas and how they influence the market. The article focuses on the analysis of the current distribution and control of production capacities across the EU. Market concentration has been measured by the Herfindahl - Hirschman Index. This indicator helps us to identify the real power and position of countries and firms operating in the European quota sugar market. The second measure used is the "Four firm (Five - firm) concentration ratio", which express the partial share in quota beet sugar production. Recently, there have been about 130 companies operating in the EU - Single Market. Approximately 75% of them are specialized only in sugar beet production. Although we can consider the number of companies operating in the EU to be quite high and would expect a high level of competition, the reality is different. The European market has been dominated by six large multinational alliances that control not just their own production capacities but also the capacities of subsidiaries. The situation in original quota A is even more complicated. Just 19 member states currently produce beet sugar. France has the dominant position in terms of quota size (22.2%), followed by Germany (21.4%) and Poland (10.4%). In the case of this market we can talk about a typical oligopoly. However, the quota sugar market within the EU is primarily controlled by companies (alliances) operating in individual countries. It is therefore necessary to liberalize the European market; otherwise the power and influence of the largest European companies will grow. This situation is especiallycritical in, for example, Finland, Lithuania, Hungary and Sweden, where the allocated quota is controlled by two, or even one subject.