In the course of the past decades major transformations in the Italian food industry induced considerable structural changes: on one hand, the creation of large industrial groups, with substantial input of foreign capital and, on the other, the concentration and geographic specialisation of numerous small and medium enterprises, with the formation of specific and typical agri-food local system (districts). To take account of the presence of food districts the analysis of the Italian food industry could not be conducted at national and regional level but it has to be studied at province and local level. It is also useful to analyse the food industry with reference to the different sub-sectors. We will conduct an in-depth analysis of the local systems (districts) of two sectors meat and fruit & vegetables processing. We will use balance-sheet data of the processing firms that were active in the meat (446 firms) and fruit & vegetables (227 firms) sub-sector in the years from 1996 to 1999. The analysis will consider the most significant balance sheet ratios, such as returns, productivity and labour cost in these local systmems. Then, we will consider the economic assessment of the firms belonging to local systems of the two sectors and compare with the non district firms. For the efficiency analysis will estimate a stochastic frontier production function in order to determine the "district effect". This analysis will also be directly correlated with investment in technological innovation. The economic and efficiency analysis confirms for many aspects the presence of a "district effect" in the Italian food industry.