Dairy processing industry in the European Union: Country-group clustering in pre and post-milk quota abolishment periods

Abstract

The European Union dairy processing sector has an important position and role in processing food and drinks in EU28 concerning the share of turnover, value-added, and employment. Its products belong to the most imported and exported items, mainly in EU countries. The article aims to evaluate the competitiveness of the EU milk market with respect to pre- and post-milk quota elimination periods. In addition, the paper identifies similar characteristics of the EU dairy sector, including milk production and processing. Eurostat and FAOstat data from 2008-2018 were used. Based on the clustering of k-means, five groups of EU countries were distinguished. The clustering analysis reveals that the post-communist EU member states are characterised by similar levels of dairy processing industry characteristics. In addition, the article shows that the competitiveness of the dairy processing industry is higher in the old EU member states (Belgium, Germany, Ireland, Greece, Spain, France, Italy, Luxembourg, Netherlands, Austria, Portugal, Finland, Sweden and the United Kingdom). The results indicate that the abolishment of the milk quota has not induced visible changes in the clustering of characteristics of the dairy processing industry in EU countries.

Keywords

• milk industry
• milk production
• milk quotas
• competitiveness
• market orientation
• k-means clustering