How the market for standards shapes competition in the market for goods
Sustainability standards in the cut flower industryA new DIIS Working Paper by Lone Riisgaard explores the emergence of multiple standards seeking to regulate the social conditions in the production of cut flowers aimed at the EU market. The paper investigates developments in these standards and the effect of standard harmonization attempts on the terms of competition in the cut flower value chain. The analysis shows that the harmonization of flower standards has a potential to ‘lift the standard bar’ by transforming risk management standards into product differentiation standards. The paper also shows how the market for standards can shape competition in the market for flowers by altering the terms of participation in the growing market segment for ‘sustainable’ flowers. Through the standard harmonization initiative Fair Flowers Fair Plants, Dutch growers are now able to compete in the market for socially labelled flowers which before was restricted to Southern producers.