Private standards include company standards, voluntary standards and consumer standards.
The terms ' voluntary standards' and ' private standards' are frequently used interchangeably. Indeed, private standards developed collectively by private sector actors are frequently referred to as 'private voluntary standards'
The voluntary standards are also called the company standards, which represents the various segments of the food industry. These standards generally reflect a consumer image that becomes a trademark or symbol of the product quality. Generally speaking, these voluntary standards are used by the private firms and they tend to vary depending upon the particular requirements for any given item.
The voluntary standards have come in to practice due to the sensitivity of consumers to food safety. This made food-handling companies, especially the leading companies with high profiles, increasingly keen to achieve food safety. These companies are fully aware that if they mishandle food safety requirements, such as mislabeling, they will be forced out of business, far more quickly than before, by the government, business partners, and consumers.
Therefore, tracking and tracing becomes a requirement. The sensitivity of consumers also offers opportunities, because manufacturers can distinguish their products from their competitors’ by meeting certain standards or providing traceability information. It means that safety-conscious retailers and manufacturers can be more successful in their businesses.
For example in Japan in addition to the public food safety standards, Japanese supermarket chains set their own company specific quality standards. The number of retailers with their own standards has been increasing recently.
Company quality standards mainly relate to issues such as size, uniformity of size, appearance, and freshness. For suppliers in developing countries, these standards are hard to meet. Furthermore, they often differ per retailer, and retailers usually are very strict. Furthermore, it is not easy for companies from developing countries to become new suppliers to Japanese buyers, particularly, with regard to the quality aspects. The Japanese buyers prefer bigger suppliers with good access to capital and technology.
Voluntary consensus standards represent another group of private standards and are established by coalitions of firms or industries to serve a collective purpose. Government may be involved, for example in facilitating the establishment of the standards, or these may be entirely private sector initiatives. Consensus standards have some of the properties of a club good: they are non-rivalrous but somewhat excludable.
Examples of consensus standards for food safety and food quality include initiatives from coalitions of food retailers, such as GLOBAL GAP and the Global Food Safety Initiative (GFSI), while the Assured Food Standards program (the so-called Red Tractor program) is driven by a coalition of agricultural producer organizations in the UK.
Individual company standards.
These are set by individual firms, predominantly large food retailers, and adopted across their supply chains. These are frequently communicated to consumers as sub-brands on their own/private label products. Examples of such brands are
- Tesco's Nurture6,
- Tesco Nature's Choice
- Carrefour's Filières
This communication to the consumer make claims about the superiority of product or process attributes. Such standards may have national or international reach.
In some cases, such as Carrefour, the standard is applied in multiple subsidiaries of the parent company. Though the standard is used by a company for its retailing operations in a single country, the standard itself has international spread as it is frequently applied to suppliers based in many different countries.
Example: Farmers in USA will be certified to the Tesco Nature's Choice standard, that underpins the Nurture sub-brand, if they are exporting products to Tesco in the UK.
Collective national standards.
These standards are set by collective organisations that operate within the boundaries of individual countries, including industry associations and NGOs. These organisations can represent the interests of commercial entities (for example food retailers, processors or producers) or be NGOs. These and other entities are then free to adopt them if they wish. It is important to note, however, that some of these standards are inherently national, while others have international reach. Some such collective national standards are specifically designed to establish claims about food from particular countries or regions. The Farm Assured British Beef and Lamb (in the UK) and the QC Emilia Romagna (in Italy) schemes sustain claims about the superior attributes (safety, quality, environmental impact, etc.) of products conforming to these schemes. They are designed to differentiate these products from competing products. As a result, they are usually "visible" to the consumer; announcing their presence in the form of labels and trademarks.
The Codex Alimentarius Commission bas been developing international food standards since 1963, shortly after the establishment of a joint Food Standards Programme by the Food and Agriculture Organization of the United Nations (FAO) and the World Health Organization (WHO).
The work of Codex is the preparation of international food standards, codes of good practice, labelling guidelines and many other recommendations that Governments can use to regulate international and domestic trade in food. These are all voluntary standards; there is no direct obligation on member Governments to apply Codex standards. However, the Uruguay Round Trade Agreements of the World Trade Organization (WTO) oblige countries to base their national food standards and regulations on Codex standards, unless the country concerned can show legitimate reasons for applying stricter or more comprehensive standards.