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Social responsibility in the marketplace: asymmetric information in food labelling

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This paper takes as its focus the adoption by the Co‐operative Wholesale Society of what appears to be a socially responsible stance on food labelling practice and policy through the publication of a public report and a proposed code of practice.

The central issue in the debate surrounding labelling is the question of ‘asymmetric information’ (when one party knows more about a product than the other). In order to function, markets need perfect information. The existence of asymmetric information gives rise to ‘market failure’ which prevents the ‘free market’ from functioning according to the laissez faire model. It can be argued that regulation will overcome this problem. However, this paper counters this argument on several grounds. In the first part of the paper labelling is examined as a textual construction, and ethical dimensions are revealed through an awareness of discourse and signification, which gives rise to a view of packaging as a version of reality partially built through connotation and association.

The second part of the paper examines political and regulatory concerns. Marketing and economic theories are discussed in terms of their impact upon ethical issues in food labelling. Sense is made of various arguments about the policy and practice of food regulation – particularly in the wake of the James Report calling for the establishment of a Food Standards Agency. Tactics for resisting regulation are also examined. The paper analyses the role and motivation of the CWS in taking these steps.

Consideration is given to the issue of where responsibility for information giving and public health education might lie, and what phenomena act as barriers to increased public awareness and action on dietary matters. Finally the debate over food labelling is used as an example of why it is problematic (and possibly unethical) to promote the free market model as the only sensible alternative to other modes of economic organisation.

Document Type: Research Article


Affiliations: Bolton Business School

Publication date: January 1, 1999


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