We examine theoretically and empirically the factors associated with commodity organizations’ voluntary adoption of stricter food safety guidelines. Our theoretical analysis finds that larger organizations are less likely to require members to invest in food safety procedures due to higher implementation costs.
Recalls induce organizations to adopt stricter food safety standards only when expected future gains from improved product reputation outweigh the short run costs of implementing those standards. The same logic holds for organizations representing growers of a product with higher demand, e.g., a larger share of fruit and vegetable sales. Organizations whose members have a larger share of the market for their product are more likely to adopt stricter food safety guidelines when that investment induces members to increase output, a necessary condition for which is that members’ current food safety procedures are more protective than the industry average.
Our econometric analysis finds that organizations with more members are less likely to adopt food safety guidelines for their members, as our theoretical analysis predicts. Organizations whose members account for a larger share of the market for their product and organizations for commodities representing larger shares of fruit and vegetable sales are more likely to implement food safety guidelines, consistent with considerations of long term profitability increases due to improved reputation for safety outweighing concerns about increases in cost of production. Organizations that have experienced negative shocks to reputation as measured by the number of Class I FDA recalls are also more likely to adopt food safety guidelines, again consistent with considerations of long term profitability due to improved reputation for safety outweighing concerns about increases in cost of production.
Foodborne illness outbreaks, collective reputation, and voluntary adoption of industrywide food safety protocols by fruit and vegetable growers
Toronto, Los Angeles and New York City, along with hundreds of jurisdictions have figured this out: public health should disclose public health ratings, at the door, when people make up their mind about entering an establishment to spend their money.
But the UK and several Australian states go through this convulsed process where they have scores on doors, but restaurants only have to post them if they want to, and who knows about food in school or hospital cafeterias.
The Brits were never ones for public disclosure (see Mad Cows and Mother’s Milk, 1997, or Yes, Minister).
Australian newspapers are reporting that customers are demanding voluntary food hygiene ratings become mandatory across New South Wales restaurants.
Same in the UK.
As someone who has been involved in these public disclosure efforts, including NSW’s back in the day, and advocated mandatory public disclosure from the beginning, it’s painful to watch the contortions.
According to The Border Mail, “Some retail food businesses in NSW display their rating in the window, but only if their council signs up to the program and only if the business is happy with its rating.
Councils and industry groups are calling on the NSW Food Authority initiative, Scores on Doors, which issues certificates with three, four and five-star ratings during routine health inspections, to be made mandatory to standardise food safety across NSW and give customers more consistent information about hygiene at food establishments.
Since the program was launched in 2010, only about one-third of local governments in NSW have adopted the system.
North Sydney Council is the latest to announce that from July 1, following annual food safety inspections, it will begin issuing certificates that eateries can then choose to display.
“If a restaurant is displaying the purple and green poster, it has met minimum hygiene and food safety standards during the last food inspection. If it’s not displaying one, they can ask why,” North Sydney mayor Jilly Gibson said.
Wok On Inn at The Rocks, which scored five stars, has been displaying the certificate since the end of last year, and waiter Sunny Dongdang said he thinks that all businesses should be required to do so.
Australia take note: Even though Toronto, Los Angeles and New York City have all figured out mandatory disclosure of restaurant inspection grades on the door – you know, when people might actually make a decision – the Brits and Aussies opted for a voluntary system, so if a restaurant gets a 2-out-of-5 it’s just not posted.
The Telegraph reports that the UK government came under pressure last night from council leaders who called for a change in the law to force high-class establishments – even Michelin starred ones — to publicise their hygiene rankings in a bid to reduce the risk of diners eating unsafe food and becoming ill.
The change would affect all restaurants but those with Michelin stars are set to be hit particularly hard, as research by the Food Standards Agency (FSA) shows their rankings are generally lower than many familiar chain restaurants.
I repeat, Michelin-starred restaurants generally rank lower than chain restaurants.
Fancy food ain’t safe food.
In December, FSA found 83pc of high street chains were given the best rating of five out of five, compared to just 55pc of Michelin star restaurants.
Michelin stars, a mark of exceptional quality food, are awarded to businesses by mystery shoppers and are judged independently of the official hygiene ratings.
Safety and quality are altogether different measures.
(Safety and quality are different measures, see below.}
The FSA said all businesses should be able to reach this top rating of five.
But Bruce Poole, owner of Chez Bruce, a Michelin star restaurant in Wandsworth with a hygiene rating of lower than five, defended top restaurants which did not score top marks.
He said: “It is very difficult for restaurants like ours as unlike high street chains which have restricted menus, we have fresh food coming through the day – sometimes up to 70 different items. We have to be able to show that all these pieces of produce have been handled correctly. For example we were downgraded from five stars because we couldn’t prove that we had frozen some fish at the correct temperature.”
Simon Blackburn, Blackpool councilor and chairman of the Local Government Association safer and stronger communities board, said: “It’s not always easy for people to judge hygiene standards simply by walking through the front door of a premise and know whether they are about to be served a ‘dodgy’ meal that could pose a serious risk to their health.”
An FSA spokesperson said: “We very much favour making this system compulsory in England too, as we believe this will be better for consumers. It will also be better for businesses that achieve good standards as they will get more recognition and it will increase the spotlight on those not meeting the grade.”
“Anyone in England who sees a business without a hygiene rating sticker currently has to decide if they want to eat or buy food there without knowing what’s going on in the kitchen” said councillor Simon Blackburn, the chair of the LGA’s safer and stronger communities board.
“It’s not always easy for people to judge hygiene standards simply by walking through the front door of a premise and know whether they are about to be served a ‘dodgy’ burger or kebab that could pose a serious risk to their health.
“Councils always take action to tackle poor or dangerous hygiene and improve conditions and see first-hand what shockingly can go on behind closed doors at rogue food premises.
“Businesses have recently been prosecuted for being riddled with mice or cockroach infestations, rodent droppings on food and caught with a chef smoking when preparing food.”
Mandatory display of food hygiene ratings is supported by the consumer organization Which?, the Chartered Institute for Environmental Health and many environmental health officers.
Last year Gordon Ramsay’s Maze restaurant in Mayfair, London, scored just two out of five after inspectors found cockroaches on the premises. Immediate steps were taken and Maze now scores top marks.
The LGA released details of recent food safety breaches, including in Croydon where more than 100 food outlets failed to meet expected hygiene standards last year, including 22 on a single street.
Port Stephens restaurateurs have voted with their feet in rejecting the New South Wales Food Authority’s Score on Doors food safety campaign.
Scores on Doors is a volunteer star-rating system given to food outlets to display in store following routine food safety inspections.
According to the Port Stephens Examiner, the town signed up in October 2011 to be part of a state-wide trial of the program, with a staff report stating it was an opportunity to “improve consistency of inspections and outcomes for food businesses”.
However, more than a year later the program has been dubbed a failure, with only 10 food outlets out of 338 within the Port Stephens Local Government Area signing up.
Matthew Brown, the council’s development assessment manager, wrote in a report to councilors, “It is the opinion of the environmental health team that the lack of interest from food business proprietors is due mainly to the initiative being a non-compulsory trial [and] participating voluntarily could potentially result in an unsatisfactory rating that they had no choice but to display to the public.”
One business supportive of the plan was Medowie Macadamias, which received a five-star rating, the highest available.
Owner Scott Leech said it was hard to understand why businesses would not support the plan.
“I think it’s a great idea, I really do. If you have nothing to hide you have nothing to worry about,” he said.
Consumer Focus Wales says more than 60 schools, nursing homes and hospitals in Wales have sub-standard food hygiene and is calling for full inspection reports to be made available to the public in order to protect vulnerable groups.
BBC News reports the watchdog has published a map showing public institutions with ratings below the satisfactory score.
Maria Battle, senior director of Consumer Focus Wales, called for the assembly government to use its new direct powers to ensure food hygiene ratings were displayed at business premises.
"It is not acceptable that there are publicly-funded institutions, such as hospitals and schools, serving food to vulnerable people despite failing to meet statutory requirements for food hygiene. The greatest tool for improving food hygiene is openness to public scrutiny by making businesses display their food hygiene ratings on the premises. What greater incentive for food producers than knowing their rating will be public and their failings will no longer be hidden?"
A spokesperson for the Welsh Local Government Agency said, "The idea behind the food hygiene rating system is to promote consumer choice and drive up standards in food businesses. A business with a poor rating is generally one that is found on inspection to need to improve standards. However, the reason for a low score could be that the business does not currently have a written procedure for food hygiene. Whilst the business premises could be spotless, without this written supporting document they could not be scored above a one-star rating. It is important to note that those premises with low ratings are most likely to be in the process of improving."
Food hygiene ratings can vary from zero (urgent improvement necessary) to five (very good).
Sharon Mills, the mother of Mason Jones, the schoolboy from Deri near Bargoed who died in the 2005 E. coli outbreak after eating infected meat, said it was "diabolical" that hygiene was not up to scratch at premises serving vulnerable people.
"’I refuse to buy shrimp in the U.S. We’ve inspected plants in Vietnam. Those plants are state-of-the-art. They’re certainly better than shrimp-handling in the US."
So says Roger Berkowitz, CEO of the Boston-based Legal Sea Foods restaurant chain, who insists Asian shrimp is gaining in the U.S., not because it’s cheaper but because it’s safer.
That food safety nugget was delivered in an otherwise mundane series of articles published this week by the Christian Science Monitor.
There’s also some sharp words for the two primary U.S. inspection agencies, the Food and Drug Administration and the U.S. Department of Agriculture. USDA is inspection-focused. US law requires it to inspect every carcass of meat and poultry that it’s responsible for, even though numerous scientific reports have questioned the effectiveness of those rapid conveyor-belt inspections.
"There is an awful lot of money being spent on guys standing around watching the chickens fly by," says Glenn Morris, director of the Emerging Pathogens Institute at the University of Florida, Gainesville, and a former official at the Food Safety and Inspection Service at the USDA. "It’s hard to tell what you are getting for your money."
The USDA’s costly carcass-by-carcass inspection soaks up about 60 percent of US food-safety funding, even though it covers only about 20 percent of the food Americans eat (mostly meat). That leaves the FDA with only around 40 percent of the funding, even though it’s responsible for ensuring the safety of 80 percent of the food supply. With less funding, it’s difficult for the FDA to inspect food facilities on a regular basis.
"In my mind, [the FDA] doesn’t have an inspection system," says Scott Hurd, a veterinary professor at Iowa State University and former deputy undersecretary of agriculture for food safety at the USDA. "It has a ‘wander around and hope you bump into something’ " approach.
"Nobody ensures that" quality, says Frank Pope, who exports carrots produced in Queretaro, in central Mexico, to the US. "The market takes care of it."
Such faith in the market and voluntary efforts by the Mexican growers and packers have won over some U.S. wholesalers. "They’re working very hard to counteract that" taint, says Peter John Condakes, whose New England produce wholesale and distributing company buys more than half of its Roma tomatoes from Mexican companies. "Truthfully, in a lot of cases, the packing sheds are as strict or more strict than in the United States."