Is mandatory country-of-origin labelling a retrograde step in the long run?

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Abstract:

There is a strong push from the farming community in Australia to persuade the government to legislate the compulsory display of country-of-origin labelling on retail products. This research examines the label elements considered by grocery shoppers who are inclined to examine the country of manufacture. Shoppers are most likely to consider the brand name when choosing a product, with the odds ratio of taking note of the country of manufacture being the largest for those consumers who scrutinize the name of the product and for those who ascribe the highest importance to the product's country of manufacture. Overt identification as Australian origin, for products without a recognizable brand name, may therefore not be advantageous to Australian producers. Country-of-origin prone shoppers also seek stronger reassurance from other cues on the product label. Shoppers would have to contend with the inevitable higher prices arising from label recomposition and country-of-origin compliance. To what extent increased prices would dampen demand is a moot point.

Keywords: Country-of-origin; brand; country of manufacture; grocery shoppers; label

Document Type: Research Article

DOI: http://dx.doi.org/10.1080/09593960600980279

Affiliations: 1: School of Applied Economics, Victoria University, Melbourne, Australia 2: Department of Economics and Finance, La Trobe University, Melbourne, Australia

Publication date: December 1, 2006

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