Sales Responses to Recalls for Listeria monocytogenes: Evidence from Branded Ready-to-Eat Meats

The extent to which brand names insulate firms from the spillover effects of food safety events is a potentially important difference between branded products and the undifferentiated commodity products examined in earlier studies. This paper uses empirical models to measure sales losses experienced by frankfurter brands following a recall for a foodborne pathogen. Results indicate sales of recalled brands declined roughly 22% after a recall. Brand recovery, on average, began two to three months after a recall and sales approached prerecall levels within four to five months. There is no evidence that nonrecalled brands experienced sales losses.