Analysis on the Constraints of the Voluntary Food Safety Regulation on the Medium and Small Enterprises

Abstract

Food safety regulations have already been an important part of institutions to provide adequate protection for consumers. Under the framework of analysis of benefit and cost of food safety regulations, the scale of food producers plays a very important role. For the credence feature of food products and the imperfect product liability system in China, voluntary food safety measures are less likely to be imposed by medium and small enterprises. The market incentives of voluntary safety system are less sufficient for small firms than for large firms, so the mandatory safety regulations are necessary in order to reach higher food safety level. In addition, the full liable rules and stricter legal punishment on contaminating firms may increase the payoffs of medium and small firms and then increase the chance for safety measures adoption in medium and small enterprises.