A Study On The Influence And Spillover Effect Of Food Safety Incidents Of Dairy Industry

The healthy and safety operation of food industry is of great significance for thestability and development of the whole society. In recent years, food safety issues arefrequently occurring. Consumers are upset when purchasing of food. As a result, theyexpress deep mistrust about the food industry. The consumption behavior begins tochange. In terms of the dairy industry, the frequent occurrence of food safety incidentsresults in the dairy industry production decline, while the number of imported dairyproducts in recent years shows a rising trendUnder this social background, some scholars have carried out research on foodsafety incidents. However, the existing research mostly concentrates on aspects ofconsumer purchase decisions or influencing factors which cannot fully reflect theimpactions of the food safety incidents brought. Therefore, this paper extends theprevious studies. In terms of research subjects, the previous study only explained theone of the disadvantages that food safety incidents leaded to. In the paper, it will resolvethe affections of the food security incidents bringing to the consumer, food consumption,related industries, import and export trade and government policies. On the other hand,this paper will examine the accumulative stimulations of the food safety incidents. Withthe food safety issues, Whether or not the emergency conversion behavior ofconsumers turn out to be long-term changes; whether or not frequent incidents of foodsafety will form a cumulative effect; What are the spillover effects of the other foodsafety; And the more in-depth study of international markets for long-term impact oftrade is needed.This paper applies qualitative and quantitative research methods to the descriptiveanalysis of the consumption of dairy products, the production, the prosperity of theindustry and the import and export trade. In order to analyzing the dynamic impact ofthe food safety incidents of dairy production, the paper uses EViews to estimateshort-term and long-term balanced equilibrium. Through introducing the factor of foodsafety incidents into the model and setting multiple variables to estimate the impact, itmeasures what the “melamine” event do for the entire dairy industry as well asconsumer recovery speed. Eventually it concludes that food safety incidents had atremendous negative effect for the dairy industry. However, after three months, the production began to rise again. Since2009, a rapid increase in imports of dairy situation,the recovery of the domestic dairy industry is largely due to increased consumerdemand. Overall, the confidence of the domestic residents of the dairy industry is stillinadequate.In2007to2011, there break out five large dairy safety incidents. After the dairysafety incidents, in the overall market of dairy products, the production and the annualpercentage of dairy consumption expenditure showed an apparently downward trend.For the long-term international trade and the industry sentiment index, the import andexport of dairy products and the industrial situation are slowly returning to a normallevel in2009. However, food safety incidents repeatedly erupted. In2010, a largenumber of foreign dairy was imported; domestic dairy market situation of the industryhas been below normal level. In the international market, Chinese dairy industry is inthe disadvantage position, seriously hindering the normal operation of the industry. By2011, people gradually recover dairy consumption and production of dairy productsshows a normal rise; and dairy industry situation also returned to a normal level.However, experiencing all the food safety incidents, the consumers’ confidence of thesafety of the domestic dairy products becomes generally inadequate.In this paper, production of dairy products and the consumption structure areempirical analyzed to get a more in-depth study on the short and long term influencewhich the food safety events bring about. From the analysis of dynamic tracing on theyield of dairy products in the month, dairy production began to decline sharply in theshort term after the food safety incidents. And three months later, the yield began to pickup. In the aspect of dairy consumption structure, this paper found a trend that consumerconsumed yogurt instead of fresh dairy products and milk after the food safety incident.Moreover, the impact of the series security incidents is not limited to dairyproducts in the industry itself. Because of safety incidents breaking out more frequently,affecting a wide range of reasons, deeper negative impact, sustained so many years ofconsumer dairy food safety incidents also had a spillover effect to related industries andgovernment policies. After a series of events, consumers began to gradually change theirconsumption behavior, using yogurts and other products to replace dairy. And theybegan to tend to buy imported products, which had led to some countries and regionspromulgating the restrictive policies; Dairy industry began to adjust the industrialstructure, that dairy-farming industry tend to be on large-scale, standardized andintensive. At the same time, a large-scale dairy industry mergers and acquisitions appeared; Milk sales in pharmacy; the policies of government, pays more attention tothe construction of milk, safety indicators, emphasizing the regularization operation ofenterprises.In sum, this paper expands the previous research on food safety incidents,extending to the chain of "farm to fork", and analyzes the spillover effects of safetyincidents of dairy products. The study could provides the reference for the adjustment ofthe industrial structure of dairy products and the change of enterprise management mode;alerting companies concern about the market situation, and also providing writtenmaterials for the government to develop industrial policy and consumer policy,promoting the effective government regulation and policy regulation. Meanwhile, itmaintains the whole society operation orderly and guarantees the consumers’ legitimatewelfare.