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Consumer Willingness To Pay For Domestic Milk

Author

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  • Vandermersch, Mieke
  • Mathijs, Erik

Abstract

Dairy farmers' profit margins are under pressure due to the downward trend of EU commodity prices for fluid milk and the increasingly powerful retail sector, in combination with increasing production costs. A likely solution to counter small margins is to add value to raw milk. This paper investigates the option of using a domestic origin-certification to upgrade the value of milk. Data stem from a consumer survey, conducted at the three largest supermarket chains in Flanders (Belgium). The results show evidence for a latent demand for domestic milk. Based on actually purchased brands in combination with top-of-mind attributes, two consumer types were distinguished (price-shoppers and added-value seekers), each with a different behaviour concerning domestic milk. Socio-demographic, attitudinal and behavioural variables were found to influence the probability that a consumer is willing to pay a premium for domestic origin-certified milk. But, the influence of these variables differed between both consumer types as well as when a different bid level was proposed.

Suggested Citation

  • Vandermersch, Mieke & Mathijs, Erik, 2004. "Consumer Willingness To Pay For Domestic Milk," Working Papers 31829, Katholieke Universiteit Leuven, Centre for Agricultural and Food Economics.
    • Handle: RePEc:ags:kucawp:31829
    DOI: 10.22004/ag.econ.31829
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    References listed on IDEAS

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    2. Taglioni, Chiara & Cavicchi, Alessio & Torquati, Biancamaria & Scarpa, Riccardo, 2011. "Influence of Brand Equity on Milk Choice: A Choice Experiment Survey," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 2(3), pages 1-21, December.
    3. Lefèvre, Mélanie, 2014. "Do Consumers Pay More for What They Value More? The Case of Local Milk-based Dairy Products in Senegal," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 43(1), pages 1-20, April.
    4. Salamon, Petra & Weible, Daniela & Weber, Sascha & Christoph-Schulz, Inken, 2016. "Pros and Cons of Introducing a Mandatory Country of Origin Labelling for Dairy Products in Germany," 2016 International European Forum (151st EAAE Seminar), February 15-19, 2016, Innsbruck-Igls, Austria 244520, International European Forum on System Dynamics and Innovation in Food Networks.
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