Transcript Forces Affecting the Distribution Systems

Chapter 4
Forces Affecting the Distribution
Systems
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Economic Force
Political Force
Sources
(growers, manufatuures,
and processors)
Intermediaries
(middlemen)
Ethical Force
Retailers
(hospitality operators)
Legal Force
Consumers
Technological
Force
Other Forces
Economic Force
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Supply and demand
 Basic commodities are
typically acquired through a
bidding procedure
 Co-op farmers
 Established market prices
Perceived value
 Perceived quality +
Perceived services / EP cost
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Economic Force, Cont.
What is the difference between AP price
and EP cost?
 Monopolistic competition
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Political Force
Lobbyists –The NRA
 Primary sources have the most influence
 Typically used to influence produce
availability, prices, and channel member
behavior
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Ethical Force
Define ethical behavior
 What is ethical?
 Codes of ethical behavior
 Examples
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Legal Force
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Sherman Act (1890)
Meat safety legislation
 Sinclair Lewis’ The Jungle
 Pure Food Act (1906)
 Meat Inspection Act (1907)
 USDA established in 1862
 Primarily focuses on meat, poultry, and eggs
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Legal Force, Cont.
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Meat safety legislation
 Poultry Products Inspection Act (1957)
 Wholesome Meat Act (1967)
 Wholesome Poultry Products Act (1968)
The Federal Food, Drug, and Cosmetic Act (1906)
 FDA administers this law
 They evaluate contaminate levels
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Legal Force, Cont.
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Seafood safety legislation
 PUFI for a fee
 FDA has the authority to examine seafood in
interstate commerce.
Federal Trade Commission (1914)
 Amended by the Wheeler-Lea Act (1938)
 It deals with advertising, deceptive promotions,
monopolies,and conduct in the marketplace
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Legal Force, Cont.

Clayton Act (1914)
 Used to control antitrust violations
 Tying agreements
 Exclusive dealings

Perishable Agricultural Commodities Act (1930)
 Control interstate commerce
 Prohibits unfair practices in sale of produce
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Legal Force, Cont.

Agricultural Adjustment Act (1933) &
Agricultural Marketing Agreement Act (1937)
 Ensure steady flow of perishable products

Robinson-Patman Act (1936)
 Known as the “small business protection act”
 Promotional discounts favoritism through a
quantity limits provision
 Predatory pricing
 Gas station example
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Legal Force, Cont.

Heart Act (1966-1969)
 Packaging pictorial aspects
 Misleading descriptions and illustrations
 Package label regulations
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Other Laws
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Franchise law
Contract law
Agency law
Title to goods
Consignment sales
Warranties
Patents
Rebates
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Technology Force
Genetically engineered foods
 Preservation methods
 Value added foods
 Transportation
 Computerization
 Packaging
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Copyright ©2008 John Wiley & Sons, Inc.
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