ISO 9000, transaction costs and food safety in the United Kingdom food sector

Food safety legislation and retail structure influence transaction costs in the food sector. Institutions, such as voluntary quality assurance programs, evolve to reduce those transaction costs. This study develops a conceptual framework which suggests that the specifics of food safety legislation, such as the due diligence defense requirement in product liability, can have important impacts on transaction costs in the food sector. How regulations are implemented is important because the same level of food safety and quality can be achieved with different transaction costs. The conceptual model serves as the basis for an empirical investigation of British food legislation and retail structure and its impact on transaction costs.;The increase in transaction costs arising from changes in food safety regulations is hypothesized to lead to institutional innovation, which will reduce transaction costs. The institutions of choice in this case are voluntary quality assurance standards such as ISO 9000 and the retailer quality assurance programs. Such voluntary quality assurance standards may become effective barriers to trade if they become standard business practice in importing countries.