The agricultural reform in Hungary broke the previously vertically integrated agri-food system in different lines. The structures in agriculture, food industry and food retailing have fundamentally changed. These changes have also influenced the vertical governance structures in agri-food sector. The aim of this paper is to investigate the choice of farmers among various supply channels in Hungarian fruit and vegetable sector employing the framework of transaction cost economics. Our analysis is based on a survey among fruit and vegetable producers in Csongrád county in respect the choice of marketing channels. A multinomial logit model is applied to reveal on the determinants influencing the choice among various supply channels. The results seem to contradict some of the basic propositions of transaction cost economics.