Costs of monitoring food safety and vertical coordination in agribusiness: What can be learned from the British Food Safety Act 1990?

Jill Hobbs and William Kerr

Agribusiness, 1992, vol. 8, issue 6, 575-584

Abstract: The British Food Safety Act 1990 may significantly affect the structure of agribusiness. The most important aspect of the new act is the introduction of the “due diligence” defence clause. Food companies must prove that they exhibited due diligence in ensuring that food in their possession conformed to the provisions of the act. This may significantly increase the monitoring costs facing food companies. As a result, alternative forms of vertical coordination that minimise the costs of compliance with the act may evolve. Agribusiness companies need to be aware of the potential impact of the due diligence clause on monitoring costs and policy makers need to consider the implications for industrial structure when framing food safety legislation. © 1992 John Wiley & Sons, Inc.

Date: 1992
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Persistent link: https://EconPapers.repec.org/RePEc:wly:agribz:v:8:y:1992:i:6:p:575-584

DOI: 10.1002/1520-6297(199211)8:6<575::AID-AGR2720080608>3.0.CO;2-N

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