CHALLENGES FOR BRAZIL'S FOOD INDUSTRY IN THE CONTEXT OF GLOBALIZATION AND MERCOSUR CONSOLIDATION

Abstract

This paper examines how the Brazilian food industry has been heavily affected by several recent institutional and economic changes. The food industry, including the processing and retail sectors, is part of a broader agribusiness system that conditions corporationsÂ’ strategies, performance, and adoption of adequate governance structures. The Brazilian agroindustrialization process that preceded the formation of the sub-regional free-trade area (Mercosur) and economic liberalization influenced subsequent development of the agribusiness and food system in the Mercosur countries and their investment and trade links to countries outside Mercosur. The article emphasizes business strategies for coping with challenges and opportunities that have arisen from Mercosur integration, from economic stabilization programs and, more importantly, from a broad range of institutional changes such as trade liberalization, deregulation, and the friendlier treatment of foreign capital. These changes have together fostered the globalization process in the region and have stimulated different responses from large and small firms, all threatened by the new, competitive environment.Agribusiness, International Relations/Trade,