Analysis of Market Concentration and Profitability in the Polish Sugar Industry, 1999-2025
Purpose: The primary aim of this research is to analyse the degree of market concentration using the Herfindahl-Hirschman Index (HHI) and to evaluate the profitability of sugar production enterprises operating in Poland between 2019 and 2025. Furthermore, the study seeks to verify whether the size of a company’s market share constitutes a significant factor differentiating its financial performance. Design/Methodology/Approach: The empirical analysis is based on individual financial data (profit and loss accounts and balance sheets) from the four dominant entities in the Polish sugar sector: Krajowa Grupa Spożywcza, Pfeifer & Langen Polska, Südzucker Polska, and Nordzucker Polska. A panel data approach was employed to capture both cross-sectional differences and changes over time. Market concentration was measured using the HHI based on sales revenues, while profitability was assessed using the Return on Assets (ROA) indicator. Findings: The study confirms that the Polish sugar market operates as an oligopoly with a moderate degree of concentration, with HHI values ranging from 1,459 to 2,286. The panel regression model indicates that market share is not a statistically significant determinant of ROA. Practical Implications: The findings indicate that variations in profitability cannot be explained solely by market share, suggesting that other firm-level determinants may also be significant. Management should consider the sector’s high sensitivity to international market conditions and the potential risks associated with further trade liberalisation, such as agreements with Mercosur countries. Originality/Value: This research provides an up-to-date empirical assessment of the relationship between market structure and profitability in a key EU sugar-producing country. It contributes to the existing literature by demonstrating the separation between market power and financial performance in a highly regulated yet volatile agricultural commodity market.