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Abstract

The purpose of this paper is to study the evolution and the structure of the Portuguese processing tomato industry. We intend to pick up the dynamics, the strategic behaviour and structural the changes in the tomato industry in Portugal during the period of 1990-2005. An overview of world and domestic production and trade in the last two decades is followed by the descriptive analysis and by the development of the market structure. The market structure analysis was carried out during 1990 - 2002, under the Structure-Conduct-Performance framework. This paper examines the concentration effect on the performance and firm's strategy. The result indicates that, market concentration in tomato processing industry in quantity is a moderate concentrate market but the concentration level has increased over the years. In contrast the seller concentration has always been higher. The CR4 and HHI ratio indicates values between 75% - 91% and between 0.20-0.30 respectively. On some years, the power market measured by an approximation to the index Lerner indicates negatives values resulting from the negative net income. The results of the Index Lerner below 0,06, indicate, that the firms lacks market power. We did not find linkage between the market share and R&D expenses. Marketing costs are concentrated in four biggest companies but the concentration increase didn't change the marketing costs evolution and profits. The use of market share on advertising or research development is not observed.

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