New study shows UK supermarkets secure price premium for MSC-labelled seafood products

July 8, 2011 09:10

New research shows that UK retailers are achieving a price premium of over 14 per cent, and achieving higher sales, for products bearing the MSC ecolabel, compared with their non-labelled equivalents, reports with reference to Marine Stewardship Council.

The study, published in the Journal of Agricultural Economics is statistically rigorous evidence that consumers value the positive environmental attributes of MSC-labelled products highly enough to pay a premium for them.  Previous studies have analysed the factors which made it more likely that consumers might buy ecolabelled seafood products; but this is the first study to use price data to present objective verification of market benefits for suppliers using the MSC ecolabel.

The study, carried out by Professor Cathy Roheim and Ph.D. candidate Julie Santos of the University of Rhode Island, and Professor Frank Asche of the University of Stavanger, examined scanner data for sales of 24 frozen pollock products in a selection of London metropolitan area supermarkets over a period of 65 weeks from 2007 to 2008. Twelve of those products displayed the MSC ecolabel.  After adjusting for differences arising from other product attributes such as branding, product form and size, the study identified a price difference of 14.2 per cent between MSC-labelled and non-labelled pollock products.  Sales of MSC-labelled products were also higher, at 3.3 million units, during the period than non-labelled products, at 3.03 million units.
UK a good test bed for market benefits analysis

In designing the study, the following factors were taken into consideration:

  • UK-based seafood processors and retailers were early adopters of sustainable seafood sourcing policies, and many have strong commitments to the MSC program;
  • UK consumers have a relatively good chance of having some familiarity with the MSC ecolabel because of the established marketing communications strategy for the MSC program in the UK;
  • The Alaska pollock fisheries were certified relatively early on in the MSC program, and enough time had therefore elapsed to ensure a significant number of MSC-labelled pollock products were available in the market.
Together, these elements made Alaska pollock products in the UK market an ideal starting point from which to evaluate the market benefits of fisheries certification.

Study author, Professor Roheim, said: "We believe the evidence of market benefits of fisheries' certification, in the form of price premiums at retail level, that our study presents, is a positive outcome for those engaged in ecolabelling programs.  

"The success of such programs depends upon enough well-managed fisheries becoming and remaining certified to supply the market; and upon creating incentives for less well-managed fisheries to improve to the point where they can also be certified sustainable.  Market benefits - such as price premiums - are necessary for ecolabelling programs to influence production and management practices in industry. For suppliers, price premiums are a direct means by which to offset the costs incurred from taking part in certification programs, and are more directly measurable than other market benefits such as improved market access.

"Obviously, this is only the first of further needed market analyses to address the existence and size of a premium for other markets, beyond the UK, supplied with Alaska pollock.  We need to find out whether the premium makes it from retail level to production level, to directly compensate fishers, and whether the premium is sufficient to cover the costs of a sustainable fishery and certification.  And, of course, there are over 100 other MSC certified fisheries and many other markets yet to be investigated.

"But this is a good beginning, and does show, for the first time, that a price premium is being obtained at the retail level for labelled, certified sustainable pollock over non-labelled pollock."

Economic benefits of MSC certification - support for MSC theory of change

Welcoming the study, Chris Ninnes, MSC Deputy Chief Executive, said: "The market incentives created by the uptake by major global buyers of seafood are at the core of the how the MSC promotes positive change in the world's fisheries.  Hard statistical data that retailers are securing a price premium for MSC-labelled products add to the growing body of evidence that the market rewards are there for those suppliers and fishers willing to invest in putting sustainability at the heart of their business.

"Professor Roheim's and Professor Asche's work is an excellent addition to the canon of academic studies on ecolabelling and certification programs. I very much hope this is a highly repeatable study that proves to be just the first of many such studies across different markets and for different seafood products."

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