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Abstract
Food prices vary significantly across European Union countries, and the extent of this variation has evolved in recent years. This article examines the underlaying factors driving these differences. Unlike previous studies, it considers all stages of the food supply: agricultural production, processing, distribution, and consumption. Using dynamic panel models, the study identifies multiple determinants of food price disparities across countries. At the production phase, relative price increases are linked to a decline in economic farm size, an expansion in farm area, and rising agricultural production costs. At the processing and distribution stages, higher prices are associated with increased processing costs, smaller average enterprise size, and greater retail concentration – reflecting the stronger bargaining power of processing and retail chains. Finally, at the stage of food consumption, relative differences in food prices are primarily shaped by divergence in consumer wealth.