Supply Issues in China's Milk Adulteration Incident
Agricultural Economists’ Conference, August 2009
23 Pages Posted: 13 Jan 2011
Date Written: August 2009
China’s melamine milk adulteration crisis highlights the challenges that arise as large well capitalized companies procure raw materials from a diffused supply chain of scattered small farmers and milk collection stations. As milk prices climbed sharply in 2007 and companies branched out into new territories, intense competition for raw milk supplies strengthened incentives to water down and adulterate milk. Effective food safety measures must account for incentives, the distribution of market power in the supply chain and market dynamics.
Keywords: food safety, dairy, China, melamine, market structure, supply chain
JEL Classification: Q13
Suggested Citation: Suggested Citation