Spillover effects of food recalls: A milk recall scenario experiment in China.

Food recall is a major ingredient in food safety with existing literature focusing mainly on its direct impacts. Few studies focus on possible spillover effects. It is hypothesized that food recalls have a spillover effect on the recalled brand and purchase channel. As a test of this hypothesis, a 2-purchase channel by 3-recall strategy scenario experiment was conducted on spillover effects of a milk recall in Beijing, China. The results indicate that food-safety scares have significant negative impacts on consumers' purchase intention on the recalled brand and purchase channel, and the impacts are more significant for online than offline marketing. However, voluntary recalls by online firms help mitigate these negative effects and restore consumers' purchase intention more than offline voluntary recalls. An online food incident creates an issue of trust toward general online platforms. Online vendors should take greater care in guaranteeing food safety and actively take restorative actions such as voluntary recalls after a food safety incident. Results provide empirical evidence for industry organizations and governments to stipulate a strict food safety and incident resolution system for e-commerce.