Differences in national legislations can affect the international competitiveness of an industry. For example, stringent EU regulations on animal welfare and environmental protection are often said to be a cost disadvantage for EU producers competing on the global market. However, in recent years, powerful retailers and food processors have started to impose requirements on downstream producers through private standards. Requirements are made both on EU- and non-EU producers and can, if extensively used, become de facto mandatory for suppliers.
This study investigates to what extent the use of private standards contribute to leveling the playing field for global competition in the food supply chain by making conditions more equal for producers on the global food market.
The study shows that retailers and food processors impose requirements on animal welfare, environmental protection and labor conditions on imports. This means that private standards decrease differences in production conditions across countries, which, in turn, implies that the requirements on domestic and imported goods are more equal than indicated by national legislations. However, firms use private standards that are heterogenic both in content and stringency. Differences in production conditions can therefore be reduced to a varying extent depending on which standard that is used.