Pre-empting public regulation with private food quality standards

Abstract

There has been a great deal of recent growth in the area of private food quality standards. This article analyses the incentives for setting private quality standards before governments do so. Since food quality standards are generally multifaceted, different types of standards will affect revenues differently. Our model shows that private firms can pre-empt public regulation by setting their own private food quality standards in order to choose the type of standards that minimises their costs. The emergence of private food standards in grocery retailing is discussed in this context. Oxford University Press and Foundation for the European Review of Agricultural Economics 2009; all rights reserved. For permissions, please email journals.permissions@oxfordjournals.org, Oxford University Press.