Export restrictions - Do consumers really benefit? The wheat-to-bread supply chain in Serbia

•Evidence of governmental policy effects on price relations along the supply chain.•Laissez-faire policy simulated for identifying the effects of the implemented policy.•Wheat processing and retail sectors benefited from the governmental interventions.•Consumers bore the greatest burden caused by the governmental interventions.•Policy effectiveness highly dependents on price behavior of supply chain actors.

Our approach combines price transmission and gross margin analysis at different stages of the wheat-to-bread supply chain. Results suggest that the effects of export restrictions on the end consumer prices for bread, and thus food price inflation, heavily depend on the price behavior of the intermediates. In contrast to theory, consumers in Serbia experienced welfare losses despite comprehensive governmental market interventions. In particular, consumers were confronted with increasing flour and bread prices, which cannot be fully explained by increasing production costs, whereas mills, bakeries and retailers increased their profits. Thus, export controls in combination with high price volatility in the supply chain have to be considered as a further factor driving food price inflation.