The Elusive Price Premium for Ecolabelled Products: Evidence from Seafood in the UK Market

TLDR

Ecolabelling is increasingly used to promote sustainable forestry and fisheries worldwide, and determining whether consumers pay a price premium is crucial for assessing the return on sustainable practices and incentivizing producers. The study investigates whether consumers pay a price premium for MSC‑certified frozen Alaska pollock in the UK market. A hedonic price model was applied to scanner data on MSC‑certified frozen processed Alaska pollock sold in London. Regression analysis revealed a statistically significant 14.2% price premium, indicating market differentiation for sustainable seafood and supporting the MSC certification program’s incentive effect.

Abstract

Ecolabelling is an increasingly important tool used in the promotion of sustainable forestry and fishery products around the world. Whether the consumer is actually paying a price premium for ecolabelled products is of fundamental importance as it indicates a return on the investment of sustainable practices, providing an incentive for producers to undertake such practices. This article seeks to address the question of whether or not an actual premium is being paid by consumers for ecolabelled seafood by conducting a hedonic analysis of Marine Stewardship Council (MSC)-certified frozen processed Alaska pollock products in the London metropolitan area in the UK market using scanner data. Regression results show a statistically significant premium of 14.2%. This implies the presence of market differentiation for sustainable seafood and the potential of the MSC’s fisheries certification programme to generate market incentives for sustainable fisheries practices.