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Product Differentiation with Credence Attributes and Private Labels: The Case of Whitefish in UK Supermarkets

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Journal of Agricultural Economics 2014; Volume 65. p. 368–382. 2014

Sogn-Grundvåg, Geir; Larsen, Thomas Andre; Young, James A.

The retail market for seafood is dynamic with substantial competition both amongst retailers and between private labels and national brands. New product attributes are added in attempts to differentiate products and to attract consumers. Credence attributes, in particular those related to eco-labels and fishing method,have become more common. But little is known about how these and other credence attributes are valued in the retail market. In addition, little is known about price differences between private labels. To estimate the value of these attributes, weekly in-store observations of selected frozen whitefish products were conducted in seven UK retail chains in the city of Glasgow. An estimated hedonic model shows a substantial price premium for fishing method (line-caught), a premium for both home (Scottish) and non-home country of origin (Icelandic) and a premium for the Marine Stewardship Council eco-label. An uncertified eco-label owned by a large seafood manufacturer leads to reduced price. The study also reveals substantial price differences between private labels for whitefish. The results contribute new insights regarding opportunities for differentiation by credence attributes which may lead to more sustainable and effective resource use along the value chain for frozen whitefish.

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