Private voluntary standards in the food system: The perspective of major food retailers in OECD countries

Abstract

The paper examines the main economic and institutional incentives which have driven major OECD food retailers in their use of private voluntary standards and discusses their growing role in shaping the agri-food system. It is based on interviews with quality and safety directors of major OECD retailers and a brief survey of retailers’ actual buyer practices. Though not all retailers are included, these firms account for over 70% of retail food sales in OECD countries. We find that the growing voice of civil society, changing legal and institutional frameworks, increased market concentration and buying power as well as their integration with financial markets has provided the setting for development of private standards. While food safety and quality standards are seen as key to maintaining and improving reputation as well as against legal liabilities, additional standards such as labour, environmental and animal welfare are also gaining ground as strategies for customer loyalty and market shares. The grass-roots retailer move in the harmonization of food safety standards is seen as an initial step towards a global approach to managing the food system, with harmonization of other standards likely in the future. Given their buyer power, these developments can be viewed as a way of governing the food system and will be important for both OECD and non-OECD food and agricultural sector evolution in the coming years.