Consumers aren't willing to pay more for country-of-origin label

Consumers aren't willing to pay more for country-of-origin label

COOL might not be so cool with grocery shoppers according to K-State, Oklahoma State study

Most grocery shoppers aren't aware meats carry a label indicating the origin of the product, and they aren't willing to pay for one, either, a new study from Kansas State University and Oklahoma State University points out.

Related: Country of Origin Labeling Creates Sticky Situation for Livestock Interests

While shoppers might not be interested in the country-of-origin labeling discussion, the governments of the U.S., Canada and Mexico are.

In October 2014, the World Trade Organization ruled in favor of Canada and Mexico on the issue of U.S. country-of-origin labeling, finding that U.S. labels break WTO trade rules.

Chris Avati shops in the meat department at Laurenzo's Italian Center on Jan. 9, 2012, in North Miami Beach, Fla. (Photo by Joe Raedle/Getty Images)

The label, WTO said, fosters less favorable treatment of imports from the United States' closest trading partners. COOL was revised in May, 2013, following a similar ruling from the WTO on a previous version of the rule.

While the issue has caused a rift in the meat industry – some groups say labels provide needed information to consumers while others suggest labels will add a large cost burden. The U.S. government, favoring origin labels, is appealing WTO's decision.

However, when it comes to consumers, the K-State and OSU researchers found an unwillingness to pay extra for the label.

"Less than one-third of the participants surveyed know that it is a law to label where the meat originates," Glynn Tonsor, associate professor of agricultural economics at K-State, said in a University press release. "Effectively, producers lose and consumers lose because we have not observed an aggregate demand increase in response to that origin information."

The labels were first implemented in 2009 and after the 2013 revision provided even more information on meat products' origins, including where the animal was born, raised and slaughtered.

Tonsor surveyed consumers in 2009 and in 2013 and found the same results: The majority of shoppers aren't interested in these labels.

Related: No Easy Solution for COOL, Ag Economist Says

"Time and time again, we find that food safety, price, freshness and taste tend to be attributes, regardless of the meat product we're talking about, that rank highly in importance and drive purchasing decisions," Tonsor said. "Social issues like origin, environmental impact and sustainability matter to consumers, but do not drive purchasing decisions."

A decision on the appeal is expected in early 2015. In the meantime, COOL remains in effect.

Source: K-State

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