International Honey Laundering and Consumer Willingness to Pay a Premium for Local Honey: An Experimental Study
16 Pages Posted: 28 Apr 2020
Date Written: October 2019
Fraudulent activities in the international honey market affect 10% of food, and cost the global food market $50 billion per annum. Although many developed countries have created regulations to combat food fraud, illegally imported honey, especially originating from China, still enters through transshipments and relabelling to mask its true origin. This honey laundering poses a health risk to consumers, as Chinese honey potentially contains illegal and unsafe antibiotics and high levels of herbicides and pesticides. We analyse whether information about the negative health impacts of laundered honey increases the proportion of consumers willing to pay a premium for local fraud‐free honey. Using a laboratory experiment, we find when consumers are given honey laundering information, their willingness to pay a premium for local fraud‐free honey increases by as much as 27 percentage points. Our findings suggest that by conveying honey laundering information and guaranteeing their honey is fraud‐free, producers can potentially increase revenues and reduce the prevalence of food fraud. Our results further show that consumers' preference for various honey characteristics and age also influence the probability of paying a premium for local honey.
Keywords: food fraud, honey laundering, international honey markets, trade diversion
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