Agrifood Safety Standards,Market Power,and Consumer Misperceptions

This article analyzes how the public regulation of food safety influences a firm's strategic behaviour in a food chain. In this context, we provide an original theoretical framework to show how, regardless of the level of standard, food safety regulation may have unexpected harmful effects. Namely, the level of compliance costs alone cannot explain the producer exclusion due to a high level of standard. We highlight how upstream producers' involvement in the market also depends on the strategic interest of the downstream firm to remunerate their compliance process. Finally, we show how the actual level of risk does not necessarily decrease when the standard is reinforced.