The greatest influence on changes happening in the global economy resides within transnational corporations. They may use their economic power both in relation to other companies, as well as to the countries, and in different ways. Therefore, the impact of transnational corporations on the processes of globalisation can be analyzed on many levels, inter alia, by specifying their impact on a particular sector or a branch of the economy in a direct and indirect manner. In a direct manner, they have an influence as the most significant players taking an active part in production, sales, etc. At the same time, indirectly – as players with a strong influence – they affect the behaviour of other players, thus even more strongly affecting the general functioning of the process of globalization.
Their activities raise a lot of controversy. The basic criticism is to do with speculative and monopolistic activities, that are carried out at the expense of other market participants. Global strategies of transnational corporations separate the various phases of production and other activities to create value added in different markets and in different countries. Thus, the ability of individual States to produce an impact on the effective enforcement of their rights towards transnational corporations is becoming smaller, especially that the latter want to produce where it is most favourable, that is cheapest. Transnational corporations gain an increased share in the added value of the economy not only as a result of their effective and competitive advantage, but also as a result of the use of taxation, pricing and organizational solutions. Also, the pressure of global companies on suppliers is one of the most important features of the current process of globalisation.
Transnational corporations operate in all links of the food economy in the world and they have a strong impact on it. For example, three TNCs hold more than 80% of the world’s cocoa trade, and three TNCs hold 80% of trade in bananas, six TNCs have an 85% share in the world’s grains trade, six TNCs have a 55 to 60% share in coffee trade, and 11 TNCs provide 81% of the world’s agricultural chemical products, and 24 TNCs control more than a half of seeds. In the food industry, four TNCs have a 51% share in the production of beer, four TNCs – have a 56% share in the production of tobacco products57.
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The scale of the share of transnational corporations in the various global food economy’s links may vary. It is largest in trade, and a bit smaller in processing (the food industry) and in the supply of agriculture, being at its lowest in agriculture. It is similar in Poland. However, compared with the developed countries of the world, and even with some of the countries of Central and Eastern Europe, the share of TNCs is lower in our country. This is due, inter alia, to a large number of small entities both in Polish retail, industry and agriculture. TNCs reluctantly take over small entities, they prefer to grow through expansion of their branches, which requires a longer time. In Poland, virtually all the largest TNCs operating in the world’s food economy are present. Changes happening in the food chain in Poland are evidence of the growing similarity of on-going processes and a link of our food economy with the global economy. They mainly occur through activities by transnational corporations in the food industry and global corporations.
In the context of globalization, the number of companies that control the demand and production is becoming smaller in the various sections of the industry and market segments, both national and foreign. For example, in the tobacco, brewing and oil industry in Poland, about 90% of the production is done in 3-4 subsidiaries of transnational corporations. The result is that more and more often unfavourable monopolistic production activities are carried out by transnational corporations in our food economy. Hence, more and more enterprises with domestic capital decide to start cooperation with retail corporations. This despite the fact that the latter take high commissions while at the same time forcing suppliers to charge the lowest prices. Another limitation of the autonomy of smaller companies is production for global retail chains under their brand names. Competition between the chains for suppliers is small, but the subcontractors strongly compete with each other. As a result, global chains reap the greatest benefits (economic surplus) from the whole process of production and trade (monopsonistic activities).
As a result of the activities of transnational corporations, food market in Poland changes rapidly. The behaviour of Polish consumers is still not very stable and often changes over time. In shopping, an important role is played by advertising and marketing activities. Therefore, TNCs are leaders in the advertising market. For example, in the first half of 2011, according to a ranking by the site Wirtualne Media (09.07.2011), corporations were in the lead. The first position was taken by Unilever, which spent PLN 279.2 million on advertising followed by: Nestle Polska, which spent PLN 180.6 million on advertising, Danone (PLN 161.4 million), Ferrero Polska (PLN 113.7 million), Mars Polska (PLN 100.7 million), Coca-Cola (PLN 78.4 million), Kraft Food Polska (PLN 77.4 million), and Grupa ywiec (PLN 77.2 million).
In addition to adverse actions, transnational corporations brought much good to our food economy, which includes, inter alia:
x a supply of capital for modernization of trade and the food industry; this concerns agriculture to a small extent,
x wider range of products in the food market,
x beneficial changes in employment – better wages and qualifications of employees in the TNCs’ subsidiaries have a positive impact on the whole economy,
x a large part of the Polish exports of agri-food products is done by global trade chains and manufacturing corporations,
x increased revenue for the State budget,
x contribution to lower food prices,
x a positive effect on concentration, both of production and trade in foodstuffs,
x they force other entities to consolidate through their actions.
The direct impact of global companies on changes in agriculture is still relatively small. A much greater impact is produced by widely understood imitation done by domestic companies for which transnational corporations are models to follow.
3.2. Analysis of global factors of an institutional nature