Analysis of Cause for China's Food Safety Problem Based on Profit Distribution Structure in Supply Chain

Abstract

On the discussion of food safety, the majority of China's scholars believe that the food manufacturer should responsible for its inferior products. The food manufacturer should be punished by government more than that of wholesaler and retailer. But the punishment produces less effect on the food manufacturer’s adverse selection. This paper establishes a three-sector model, and analyzes empirically the distribution of benefits among food manufacturer, wholesaler and retailer. The research result shows that the unreasonable distribution of benefits resulting in manufacturer’s adverse selection on food safety in supply chain. Therefore, in order to improve the governance of food quality and safety, government should concern about the distribution of benefits among food manufacturer, wholesaler and retailer in supply chain. Based on the above analysis, this paper puts forward some corresponding recommendations.