Certify or not? The effect of the MSC certification on the ex-vessel prices for Atlantic cod in Norway

Summary

There is strong evidence that ecolabeled seafood commands a price premium in the retail market in Northern European countries. At the same time, there is significant uncertainty as to whether these markups are passed on to the fishers. This is important because producer benefits are required for an ecolabel to provide incentives for sustainable fishery management and fishing practices. Therefore, we investigate whether fishers obtained price premiums for certified cod in Norway. A unique setting for this investigation was created when a part of the fishery, the one conducted within the Norwegian territorial waters, lost its certification by the Marine Stewardship Council (MSC), while it was maintained for the offshore part of the fishery. Using a difference-in-difference approach, analyzing a large and detailed dataset, we find that on average, there is no premium for certified cod, and that other factors are more important. When controlling for buyer types, the loss of the MSC certification resulted in a price reduction for cod sold to producers who make fillets for Northern European markets. However, we found no significant price effect for cod sold to the other buyer types. This highlights the difficulty of obtaining a price premium when there are alternative sources of the product.