The Strategic Use of Private Quality Standards in Food Supply Chains Report as inadecuate

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This paper highlights the strategic role retailers private quality standards play in foodsupply chains. Considering two symmetric downstream firms that are exclusively suppliedby a finite number of upstream firms and letting the upstream firms decide which retailer tosupply, we show that there exist two asymmetric equilibria in the downstream firms qualityrequirements. The asymmetry is driven by both an increase in the retailers buyer powerand the retailers competition for suppliers. The use of private quality standards induces adecrease in social welfare, which can be softened by the implementation of a public minimum quality standard.

Keywords: Private Quality Standards ; Vertical Relations ; Buyer Power ; Food Supply Chain

Subject(s): Agribusiness

Agricultural and Food Policy

Agricultural Finance

Food Consumption/Nutrition/Food Safety

Industrial Organization

Issue Date: 2011

Publication Type: Conference Paper/ Presentation

PURL Identifier:

Total Pages: 14

Record appears in: German Association of Agricultural Economists (GEWISOLA) > 51st Annual Conference, Halle, Germany, September 28-30, 2011

Author: von Schlippenbach, Vanessa ; Teichmann, Isabel


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