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Sales Responses to Recalls for Listeria monocytogenes: Evidence from Branded Ready-to-Eat Meats

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  • Michael R. Thomsen
  • Rimma Shiptsova
  • Sandra J. Hamm

Abstract

The extent to which brand names insulate firms from the spillover effects of food safety events is a potentially important difference between branded products and the undifferentiated commodity products examined in earlier studies. This paper uses empirical models to measure sales losses experienced by frankfurter brands following a recall for a foodborne pathogen. Results indicate sales of recalled brands declined roughly 22% after a recall. Brand recovery, on average, began two to three months after a recall and sales approached prerecall levels within four to five months. There is no evidence that nonrecalled brands experienced sales losses. Copyright 2006, Oxford University Press.

Suggested Citation

  • Michael R. Thomsen & Rimma Shiptsova & Sandra J. Hamm, 2006. "Sales Responses to Recalls for Listeria monocytogenes: Evidence from Branded Ready-to-Eat Meats," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 28(4), pages 482-493.
  • Handle: RePEc:oup:revage:v:28:y:2006:i:4:p:482-493
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    File URL: http://hdl.handle.net/10.1111/j.1467-9353.2006.00317.x
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    Citations

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    Cited by:

    1. Li, Tongzhe & Bernard, John C. & Johnston, Zachary A. & Messer, Kent D. & Kaiser, Harry M., 2017. "Consumer preferences before and after a food safety scare: An experimental analysis of the 2010 egg recall," Food Policy, Elsevier, vol. 66(C), pages 25-34.
    2. Elena Fagotto, 2014. "Private roles in food safety provision: the law and economics of private food safety," European Journal of Law and Economics, Springer, vol. 37(1), pages 83-109, February.
    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, 2016, Boston, Massachusetts 236112, Agricultural and Applied Economics Association.
    4. Bulut, Harun & Lawrence, John D., 2007. "Meat Slaughter and Processing Plants' Traceability Levels Evidence From Iowa," Staff General Research Papers Archive 12791, Iowa State University, Department of Economics.
    5. Pozo, Veronica F. & Schroeder, Ted C., 2013. "Effects of Meat Recalls on Firms' Stock Prices," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 151287, Agricultural and Applied Economics Association.
    6. Peake, Whitney O. & Detre, Joshua D. & Carlson, Clinton C., 2014. "One bad apple spoils the bunch? An exploration of broad consumption changes in response to food recalls," Food Policy, Elsevier, vol. 49(P1), pages 13-22.
    7. repec:bla:jscmgt:v:53:y:2017:i:4:p:13-36 is not listed on IDEAS
    8. Ollinger, Michael & Bovay, John & Guthrie, Joanne & Benicio, Casiano, 2015. "Economic Incentives to Supply Safe Chicken to the National School Lunch Program," Economic Research Report 212888, United States Department of Agriculture, Economic Research Service.
    9. 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.
    10. Thomsen, Michael R. & Ollinger, Michael & Crandall, Philip G. & O'Bryan, Corliss, 2008. "Mandatory Food Recalls," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6083, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Pozo, Veronica F. & Schroeder, Ted C., 2016. "Evaluating the costs of meat and poultry recalls to food firms using stock returns," Food Policy, Elsevier, vol. 59(C), pages 66-77.
    12. Garcia-Fuentes, Pablo & Ferreira, Gustavo & Harrison, R. Wes & Kinsey, Jean D. & Degeneffe, Dennis, 2014. "Consumer Confidence in the Food System, Media Coverage and Stock Prices for the Food Industry," Journal of Food Distribution Research, Food Distribution Research Society, vol. 45(2), July.
    13. Chebolu-Subramanian, Vijaya & Gaukler, Gary M., 2015. "Product contamination in a multi-stage food supply chain," European Journal of Operational Research, Elsevier, vol. 244(1), pages 164-175.

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