2006
DOI: 10.1007/s11129-006-2777-5
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Private labels and public quality standards: How can consumer trust be restored after the mad cow crisis?

Abstract: In those sectors faced with questions of food safety (meat, fruit, vegetables), new private labels have been set up in Europe in order to restore consumer trust. In this paper, we perform a theoretical analysis of these private labels. We propose an original model of vertical relationships between producers and retailers which takes into account two supply sources through (i) a competitive spot market on which the retailers buy a minimum quality standard product and (ii) supply contracts aimed at marketing hig… Show more

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Cited by 21 publications
(13 citation statements)
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“…Taking a relatively high quality standard q i as given, the best response of retailer D k is to considerably undercut the quality requirements of D i (see Figure 1a). 22 If q k drops just below q i ; i.e. q k = q i "; the suppliers U kj complying with q k lose their outside option in the negotiations with retailer D k : This makes delivery to the now low-quality retailer less attractive than supplying the high-quality retailer.…”
Section: Lemmamentioning
confidence: 99%
“…Taking a relatively high quality standard q i as given, the best response of retailer D k is to considerably undercut the quality requirements of D i (see Figure 1a). 22 If q k drops just below q i ; i.e. q k = q i "; the suppliers U kj complying with q k lose their outside option in the negotiations with retailer D k : This makes delivery to the now low-quality retailer less attractive than supplying the high-quality retailer.…”
Section: Lemmamentioning
confidence: 99%
“…The benefits that smallholder producers achieve through joint producer marketing constitute incentives. For instance, Belleti et al (2005) identify market access and premium prices, Moll and Igual (2005) mention higher cost efficiency and Giraud-Héraud et al (2006) cite reduction of failure in product safety as some of the benefits of product differentiation through labeling. However, in the business-to-business GGAP scheme costs may not necessarily be covered by a corresponding higher price.…”
Section: Conceptual Frameworkmentioning
confidence: 99%
“…Using our previous results and taking into account the discontinuity in the …xed fees (see 22), the retailers'reduced-pro…t functions are given by…”
Section: Equilibrium Analysismentioning
confidence: 99%