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Private labels and public quality standards: How can consumer trust be restored after the mad cow crisis?

Author Info

  • Éric Giraud-Héraud

    ()

  • Lamia Rouached

    ()

  • Louis-Georges Soler

    ()

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 higher quality private labels. We study how producers and retailers could cooperate in setting up these new labels. From a public point of view, we show the complementarity of a moderate increase in public quality standards and the creation of these new private labels. Copyright Springer Science + Business Media, LLC 2006

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File URL: http://hdl.handle.net/10.1007/s11129-006-2777-5
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Article provided by Springer in its journal Quantitative Marketing and Economics.

Volume (Year): 4 (2006)
Issue (Month): 1 (March)
Pages: 31-55

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Handle: RePEc:kap:qmktec:v:4:y:2006:i:1:p:31-55
Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=111240

Keywords: Vertical relationship; Retailer; Food safety; Minimum quality standard; Private labels;

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  11. Jayson L. Lusk & Jutta Roosen & John A. Fox, 2003. "Demand for Beef from Cattle Administered Growth Hormones or Fed Genetically Modified Corn: A Comparison of Consumers in France, Germany, the United Kingdom, and the United States," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(1), pages 16-29.
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  14. Cotterill, Ronald W & Putsis, William P, Jr & Dhar, Ravi, 2000. "Assessing the Competitive Interaction between Private Labels and National Brands," The Journal of Business, University of Chicago Press, vol. 73(1), pages 109-37, January.
  15. Karine Latouche & Pierre Rainelli & Dominique Vermersch, 2000. "Quel prix pour la sécurite alimentaire? Une évaluation contingente suite à la crise européenne de la ≪ vache folle ≫," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 48(3), pages 325-340, November.
  16. Lutz, Stefan & Lyon, Thomas P & Maxwell, John W, 2000. "Quality Leadership When Regulatory Standards Are Forthcoming," Journal of Industrial Economics, Wiley Blackwell, vol. 48(3), pages 331-48, September.
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  19. Giulio ECCHIA & Luca LAMBERTINI, 2001. "Endogenous Timing and Quality Standards in a Vertically Differentiated Duopoly," Discussion Papers (REL - Recherches Economiques de Louvain) 2001021, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
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Cited by:

  1. Caprice, Stéphane & von Schlippenbach, Vanessa & Wey, Christian, 2014. "Supplier Fixed costs and Retail Market Monopolization," TSE Working Papers 14-524, Toulouse School of Economics (TSE).
  2. Eric Giraud-Héraud & Cristina Grazia & Abdelhakim Hammoudi, 2012. "Explaining the Emergence of Private Standards in Food Supply Chains," Working Papers hal-00749345, HAL.
  3. Vanessa von Schlippenbach & Isabel Teichmann, 2011. "The Strategic Use of Private Quality Standards in Food Supply Chains," Discussion Papers of DIW Berlin 1120, DIW Berlin, German Institute for Economic Research.

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