Impact of Liability Rule on Modes of Coordination to Food Safety in Supply Chain

Abstract: In this article, we are interested in the influence of the liability rule both on modes of coordination for food safety and on the shape of the food supply chain. To our knowledge, there is little discussion in the literature on this issue. Since natural experiments are not available, we highlight the impact of the liability regimes developing two case studies in the fresh produce import industry in France. First, we analyze a regulatory change leading to the enforcement of the French strict liability rule of the importer who first supplied the product to the domestic market. This regulatory change led fresh produce importers to develop a horizontal, collective governance structure to monitor the safety of imported produce. Second, we argue that as regards the probability of being liable, supermarkets will prefer to delegate the liability linked to importing risky product in their shelves. In this respect, supermarkets’ decisions as regards liability shape the length and coordination of the supply chain.