Do ecolabel price premiums move upstream? A firm‐level analysis of the Marine Stewardship Council ecolabel

Summary

Ecolabels aim to promote sustainable production practices, but their effectiveness in incentivizing producers remains debated, particularly in settings where there are groups of producers being certified. This reflects similar challenges as in other producer programs, such as generic marketing and quality programs. In the case of fisheries, for instance, the evidence with respect to the existence of price premiums at the producer level is mixed. This is partly due to limited access to upstream data that captures variations in market demand for ecolabeled products. This study uses firm‐level data from the Norwegian cod supply chain, encompassing purchase and sales prices over 8 years for two firms, to assess if a premium is associated with the ecolabel of the Marine Stewardship Council (MSC). Our data highlight that the firms handle both MSC‐certified and uncertified cod, indicating that certification is one of several product attributes. We find that there is a premium associated with the MSC label and that it is passed upstream. In addition, product form, size, and market destination significantly influence value distribution, and regional market variation shows substantial premiums in Northern and Western Europe but none in Eastern Europe.