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The Impact of Food Safety Incidents Across Brands: The Case of the Peter Pan Peanut Butter Recall

Author

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  • Bakhtavoryan, Rafael
  • Capps, Oral, Jr.
  • Salin, Victoria

Abstract

The effect of negative publicity on consumer demand for brands is examined in the context of recall of a peanut butter brand as a result of pathogen contamination. The recall was asso- ciated with negative impacts for the implicated brand and positive effects on the leading competitor brand. Consumers responded to the foodborne illness outbreak within three weeks. The case demonstrates that consumer response is an incentive for companies to prevent safety lapses and that the problems of one brand do not necessarily harm rivals within the category.

Suggested Citation

  • Bakhtavoryan, Rafael & Capps, Oral, Jr. & Salin, Victoria, 2014. "The Impact of Food Safety Incidents Across Brands: The Case of the Peter Pan Peanut Butter Recall," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 0(Number 4), pages 1-14, November.
  • Handle: RePEc:ags:joaaec:189073
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    File URL: http://ageconsearch.umn.edu/record/189073/files/jaae696.pdf
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    References listed on IDEAS

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    1. Seth Freedman & Melissa Kearney & Mara Lederman, 2012. "Product Recalls, Imperfect Information, and Spillover Effects: Lessons from the Consumer Response to the 2007 Toy Recalls," The Review of Economics and Statistics, MIT Press, vol. 94(2), pages 499-516, May.
    2. Arnade, Carlos Anthony & Calvin, Linda & Kuchler, Fred, 2008. "Market Response to a Food Safety Shock: The 2006 Foodborne Illness Outbreak of E. coli O157:H7 Linked to Spinach," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6448, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Crafton, Steven M & Hoffer, George E & Reilly, Robert J, 1981. "Testing the Impact of Recalls on the Demand for Automobiles," Economic Inquiry, Western Economic Association International, vol. 19(4), pages 694-703, October.
    4. Bakhtavoryan, Rafael & Capps, Oral, Jr. & Salin, Victoria, 2012. "Impact of Food Contamination on Brands: A Demand Systems Estimation of Peanut Butter," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 0(Number 3), pages 1-13, December.
    5. Daniel Toro-Gonzalez & Jia Yan & R. Karina Gallardo & Jill J. McCluskey, 2013. "Estimation of Unobserved Attributes Using a Control Function Approach, Modeling the Demand for Mint Flavored Gum," Working Papers 2013-06, School of Economic Sciences, Washington State University.
    6. Pritchett, James G. & Johnson, Kamina K. & Thilmany, Dawn D. & Hahn, William F., 2007. "Consumer Responses to Recent BSE Events," Journal of Food Distribution Research, Food Distribution Research Society, vol. 0(Number 2), pages 1-12, July.
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    Citations

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    Cited by:

    1. Villas-Boas, Sofia B & Toledo, Chantal, 2016. "Safe or Not? Consumer Responses to Recalls with Traceability," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt2348568h, Department of Agricultural & Resource Economics, UC Berkeley.
    2. Page, Elina Tselepidakis, "undated". "Trends in Food Recalls: 2004-13," Economic Information Bulletin 276244, United States Department of Agriculture, Economic Research Service.
    3. Zarebanadkoki, Samane & Zheng, Yuqing & Woods, Timothy & Buck, Steven, 2016. "Examining the Effect of Food Recalls on Demand: The Case of Ground Beef in the U.S," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236112, Agricultural and Applied Economics Association.
    4. Bakhtavoryan, Rafael & Capps, Oral, Jr. & Salin, Victoria, 2016. "Times Series Analysis of the Peanut Butter Demand in Light of the Food Safety Issue," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235621, Agricultural and Applied Economics Association.
    5. Chantal Toledo & Sofia Berto Villas-Boas, "undated". "Safe or Not? Consumer Responses to Recalls with Traceability," Mathematica Policy Research Reports 3df01be0184744ba8ae8743fa, Mathematica Policy Research.
    6. Bakhtavoryan, Rafael & Capps, Oral, Jr. & Salin, Victoria, 2014. "Dynamics of Consumer Response to Food Contamination: The 2007 Peanut Butter Recall," Journal of Food Distribution Research, Food Distribution Research Society, vol. 0(Number 2), pages 1-16, July.

    More about this item

    Keywords

    Agribusiness;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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