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This paper investigates how consumers knowledge of the EC list (reg. (EU) 432/2012) can affect their understanding of health claims (HC). Despite the existence of a rigorous regulation on the communication of health benefits attributed to functional foods (reg. (EC) 1924/2006), there are still doubts about the efficacy of legislation. In fact, the information conveyed by HC does not always reach the consumer in a clear and understandable way, making the consumer skeptical. This paper proposes an empirical analysis to verify if this effect could be mitigated in case that the consumer knew the European register of HC. The results show how consumers skepticism is linked to trust and assessment problems that contribute to limit the HC efficacy and provide new elements to improve the health benefits regulation., Italian Review of Agricultural Economics, Vol. 75 No. 1 (2020)

This report presents the results of the research project “Pass-Through of Unfair Trading Practices in EU Food Supply Chains: Methodology and Empirical Application”. The purpose of the project is to design and test a monitoring system of unfair trading practices (UTP) along the agri-food supply chain. The investigation has special focus on assessment of the “pass-through effect”, defined as the consequences for the entire supply chain of UTPs adopted in a specific transaction. The report includes: (i) a review of the economic literature for a better understanding of the economic principles of UTPs; (ii) a review of available data sources and past experiences in UTP monitoring; (iii) the illustration of two alternative approaches for UTP monitoring: B-SEA (broad-scope empirical analysis) and IDEA (in-depth analysis); (iv) a test application of the two approaches to the EU fresh fruit sector; (v) a comparative analysis of the IDEA and B-SEA results and (vi) a discussion of the implications of our research., JRC.D.4-Economics of Agriculture

Purpose The purpose of this paper is to evaluate the market potential of food obtained from olive by-products. The marketing of such by-products (e.g. olive leaves and pulp) is a challenging opportunity for the sustainable development of the sector. Yet, consumer demand is still poorly understood. The paper contributes to filling the knowledge gap with an empirical survey of a sample of Italian consumers. Design/methodology/approach The authors provide an assessment of consumers' willingness to accept (WTA) food from olive by-products. The authors collected structured questionnaire from a sample of 289 Italian consumers. The authors asked to consumers their willingness to try a variety of food products containing olive by-products, as a proxy for their WTA the products. In order to investigate the drivers of the average WTA, the authors used the information in the questionnaire to build four constructs of interest: technophobia, neophobia, perception of benefits and awareness about sustainable consumption. The choice of the constructs and the variables was driven by the existing literature. Findings The paper shows how the WTA food with olive by-products is a general attitude of the consumer, rather than product-specific choice. The results suggest that consumers perceive the use of olive by-products as a new technology for preparing well-known food products. The authors did not find statistical evidence of the wariness of olive by-products as new food products. Technophobia is the most important factor hampering the marketing of olive by-products. Originality/value The paper is a first attempt of exploring the topic of WTA food with olive by-products.

Private food safety standards (PFSS) are widely adopted by firms in the agri-food system, as they meet an increasing consumer demand for safety and quality. Yet, recent economic literature found that PFSS might serve other purposes than just ensuring food safety. Our paper contributes to this literature, framing PFSS within a contract-theory model. We conclude that PFSS can be used to lower the coordination costs along the supply chain and that their effects go beyond ensuring the production of quality and safety attributes. The model shows that PFSS can reduce the cost of solving moral hazard problems for non-discriminating buyers facing heterogeneous suppliers.

Private food safety standards (PFSS) are widely adopted by firms in the agro-food system, as they meet an increasing consumer demand for safety and quality. Yet, recent economic literature found that PFSS might serve other purposes than just ensuring food safety. Our paper contributes to this literature, framing PFSS within a contract-theory model. We conclude that PFSS can be used to lower the coordination costs along the supply chain and that their effects go beyond ensuring the production of quality and safety attributes. The model shows that PFSS can reduce the cost of solving moral hazard problems for non-discriminating buyers facing heterogeneous suppliers. Noticeably, the opportunism may concern any of the many dimensions of the transaction, without being limited to the production of quality or safety attributes that are normed by the standard. The optimal strategy requires that the supplier’s adoption cost of the standard must be a non-negligible specific investment. This condition explains why we observe PFSS that are heterogeneous (i.e., the certification cannot be used in other transaction freely) and much more rigorous than public regulations (i.e., they require incremental costs).

Large retail chains have spent considerable resources to promote production protocols and traceability across the supply chain, aiming at increasing food safety. Yet, the majority of consumers are unaware of these private food safety standards (PFSS) and retailers are not informing them. This behavior denotes a pooling paradox: supermarkets spend a large amount of money for food safety and yet they forget to inform consumers. The result is a pooling equilibrium where consumers cannot discriminate among high quality and low quality products and supermarkets give up the potential price premium. This paper provides an economic explanation for the paradox using a contract-theory model. We found that PFSS implementation may be rational even if consumers have no willingness to pay for safety, because the standard can be used as a tool to solve asymmetric information along the supply chain. Using the PFSS, supermarkets can achieve a separating equilibrium where opportunistic suppliers have no incentive to accept the contract. Even if consumers exhibit a limited (but strictly positive) willingness to pay for safety, advertising may be profit-reducing. If the expected price margin is high enough, supermarkets have incentive to supply both certified and uncertified products. In this case, we show that, if consumers perceive undifferentiated products as “reasonably safe”, supermarkets may maximize profits by pooling the goods and selling them as undifferentiated. This result is not driven by advertising costs, as we derive it assuming free advertising.