The Mechanism Of Profit Distribution In Liquid Milk Industry Chain Of China

As a core problem of the industrial chain, the profit distribution relates directly to the stability and further development of the industrial chain. A reasonable profit distribution can not only improve each sectors’production enthusiasm, capability, but also make the industry chain coordination from upstream to downstream, reduce the cost of the industrial chain of circulation, improve the overall efficiency. Dairy industry chain has its particularity from other industry, the raw milk suppliers have a loose organization, dairy enterprises hold dominant position and the dealers take sales channel, the profit distribution mechanism of the whole industry chain is in distortion situation. Therefore, further analysis on profits distribution is of great significance to the health and sustainable development of dairy industry chain.From the perspective of the whole industrial chain, based on the theory of "supply chain","value chain" and "industrial chain", this paper analyzes three links in profits distribution of liquid milk industrial chain in Hohhot:dairy farmers, dairy processing enterprises and dairy retailers; and explores the root causes unequal profit distribution. Besides, this paper tries to realize the integration of liquid milk industry chain through introducing the revenue sharing model; ensures that each linker independently and voluntarily take part in cooperation pattern without impairing the benefits in each links; then provides a reasonable profits distribution plan through the change of the parameters of the model. Shapley value was introduced to find the optimum profits distribution plan. Finally, based on the results, the countermeasures and suggestions were given out for building a sustainable profit distribution mechanism of dairy industry chain.The results show that:first, the current status of profit distribution in liquid milk industry chain is:the supermarket> the raw milk suppliers> milk dairy enterprises; second, with the introduction of revenue sharing contract,47%of the sales income is retained by retailers,53%of it is paid to dairy enterprises;50.2%of total revenue is retained by dairy enterprises,49.8%of it is paid to the farmers; which causes that:the maximum expected profit in whole industry chain is156,719yuan every day. Third, adjusting retailers and dairy enterprise’s retained earnings share in the revenue sharing contract can realize the profit distribution of the liquid milk industry chain; Fourth, the application of the Shapley value gives the reasonable solutions of liquid milk industry chain interests distribution:the farmer obtain38,463yuan every day, accounted for24.5%of total profits; Dairy enterprises obtain37,198yuan every day, accounted for23.7%of total profits; The supermarket obtain81,057yuan every day, accounted for51.8%of total profits.Based on the results, some suggestions are put forward to promote sustainable development of dairy industry chain in China. They include:lowering each section’s cost to improve the profit of industry chain; strengthening the mutual cooperation in liquid milk industry chain to realize information sharing; set up a reasonable profit distribution mechanism; encouraging and supporting the development of dairy farmers cooperative to improve the degree of organization and farmers’bargaining power.