Consumer trust in the agri-food supply chain: a randomized controlled study of organic food labeling fraud

Purpose It is well-recognized that organic food labeling fraud erodes consumer trust in actors along the agri-food supply chain (AFSC). However, little is known about whether this scandal affects only the fraudster – or also impacts others along the AFSC. The answer to this question is important because if actors, collaborating with the fraudster, also suffer reputational damage, this could incentivize monitoring processes that, otherwise, fall to external authorities. Thus, this study analyzes how fraud, social trust, and sociodemographic variables affect trust in farmers, producers, and retailers. Design/methodology/approach A two-group, randomized controlled experiment with survey responses from 859 consumers in Germany, Europe’s largest organic food market, was conducted and analyzed applying structural equation modeling. Findings The findings suggest that organic food labeling fraud committed by any actor has a significant negative impact on consumers’ beliefs about the trustworthiness of that actor, with farmers having the least negative impact. Although the organic food labeling fraud committed by an individual actor negatively impacts consumer trust in this specific actor, it positively impacts consumer trust in the non-fraudulent actors across the AFSC. Research limitations/implications As both consumers’ trust and their reactions to fraud are usually shaped by their sociocultural-backgrounds, the results have limited applicability to populations beyond Germany. Originality/value The paper’s results indicate that potential reputational damage, caused by misbehavior of others, provides little incentive to monitor compliance with standards beyond one’s own company. Thus, this study contributes to the expansion of theoretical and political discourses on the avoidance of food scandals.