Does traceability play a role in retailer’s strategies for private labels?

Traceability is helping retailers manage food safety risks and support product differentiation. This paper aims to investigate how traceability may be used to screen supplier for private labels dedicated provider pools. Retailers in the UK and Italy have several private label product lines and increasingly select dedicated suppliers. The choice of providers is a typical agency problem as retailers contract the production for their private labels, having incomplete information on types and effort of their suppliers. Different contracts must be designed for suppliers of private labels depending on position of the product line and its food safety risk. A case study, based on the second largest Italian retailer reveals that traceability and quality assurance schemes are used together to manage suppliers of private labels