Raised Without Antibiotics: Lessons from Voluntary Labeling of Antibiotic Use Practices in The Broiler Industry

Maria Bowman, Kandice K. Marshall, Fred Kuchler and Lori Lynch

American Journal of Agricultural Economics, 2016, vol. 98, issue 2, 622-642

Abstract: Voluntary labeling improves market efficiency if consumers receive the product characteristics they demand and producers are compensated for producing these characteristics. For this to occur, label claims have to be truthful, credible, and understandable. We examine the introduction of "Raised Without Antibiotics" (RWA) label claims in the broiler industry by Perdue Farms (Perdue) and Tyson Foods (Tyson) in 2007 and the events that follow. We ask whether voluntary label claims were able to improve efficiency in the market for RWA chicken products. In this case, evidence presented as part of court testimony suggests that Tyson did not deliver the RWA attribute that consumers demanded, competitors suffered, and Tyson profited from introducing what was ruled to be a false and misleading label claim to the marketplace. While the media informed consumers and stockholders of these events, we found little evidence in publicly available data, literature, or documentation from court cases that Tyson suffered significant harm in the market, or from stockholders. The U.S. Department of Agriculture Food Safety and Inspection Service did ultimately remove Tyson's label claims from the marketplace, and the legal system provided some redress to competitors and consumers. Even so, labels with animal raising claims (such as RWA) and voluntary, process-based label claims (in general) continue to be challenged by similar issues, that is, consumer confusion, the absence of universally accepted definitions, and varying degrees of credibility.

Date: 2016
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