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Uwe Latacz-Lohmann: Lecturer in the Department of Agricultural Economics and Business Management at Wye College, University of London, UK
Carolyn Foster: Research Assistant at the Welsh Institute of Rural Studies, University of Wales, Aberystwyth, UK
ACKNOWLEDGMENT: Senior authorship is shared. The authors would like to thank two anonymous referees for valuable comments and suggestions
Introduction
Over the past two decades, growing environmental awareness coupled with concerns about health and quality of diet have led many people to question modern agricultural practices. This has been reflectedin a steadily increasing demand for organically produced food, which is perceived as being healthier and less damaging to the environment (Hamm and Michelsen, 1996; Mintel, 1995), and yet the land area under organic production and the organic share of the total food retailing market remain insignificant. In both Germany and the UK, there is a perception that increased demand is not being satisfied. Many believe the reasons for this to be an inadequate and underdeveloped marketing structure which is hindering the growth of the market (Haccius, 1996; Hamm and Michelsen, 1996; Mintel, 1995).
The UK is suffering from a small supply base, which is compounded by the factthat the existing marketing structure, dominated by supermarkets, has failedto offer sufficient incentives (price premia) for producers to convert to organic practices.
In Germany, where a small-scale, decentralized marketing structure has predominated, organic food does command significant premia and output has grown rapidly in response to conversion schemes. However, the marketing structure has not kept pace with developments in the marketplace, creating a bottleneck effect whereby the increased supply is not reaching the consumer (Hamm and Michelsen, 1996; Kesseler, 1996; Schulze-Pals, 1994). Both countries are importing large quantities, which indicates the potential for the expansion of domestic markets.
This paper considers the opportunities and constraints of a "centralized" (based on supermarkets) versus a "decentralized" marketing structure for organic food and sets out an agenda for organic marketing, highlighting how existing limitations could be overcome.
Research methods
The research was conducted in two parts. First, an extensive literature review was carried out in both the UK and Germany. This included a review of material which is not readily available such as working papers, conference proceedings, publicity material and media articles. The second part consisted...