Keywords: agriculture, cobranding, contracts, quality assurance, vertical integration, fresh meat, Spain
Quality assurance mechanisms in agrifood: the case of the Spanish fresh meat sector
The largest fresh meat brand names in Spain are analysed here to study how quality is signalled in the agricultural and food industries and how the underlying quality-assurance organisations work. We obtain two main results. First, organisational form varies according to the specialisation of the brand name. Geographical indicators, which focus on achieving high organoleptic product attributes, rely on market contracting with individual producers because it provides stronger incentives for sustained quality improvement. In contrast, private brands rely more on hierarchy, taking advantage of its superiority in solving coordination problems. Second, the seemingly redundant coexistence of several quality indicators for a given product is explained in efficiency terms. Multiple brands are shown to be complementary, given their specialisation in guaranteeing different attributes of the product.