Consumers’ willingness to pay for meat produced without using antibiotics: a hedonic price analysis in Italian supermarkets

Background Global consumption of antibiotics in animal farming largely exceeds human health care usages by representing a major threat of antibiotic-resistant bacteria spreading in the environment and along the agri-food supply chain: thus, health institutions, policy makers and private stakeholders multiply the initiatives promoting a more prudent use. In Italy, since 2016, the main supermarket chains have been proposing lines of animal products obtained without or with a reduced use of antibiotics in farms, which tripled sales between 2017 and 2019. In the poultry meat market, about 40% of total sales originate from certified production obtained without using antibiotics. Our study intends to quantify the current willingness to pay of Italian consumers for such goods. Methods Data on prices and marketing characteristics of broiler breast were collected in supermarkets of three towns in Northern Italy. 173 observations led to identify 75 different product attributes related to price: production systems (e.g. organic, without antibiotics, improved animal welfare, etc.), types of cuts (slices, thin slices, etc.), size and types of packaging, brands, supermarket chains, shop size and location (city center, suburbs, etc.). A hedonic price model was developed by aggregating the identified attributes into 14 binary variables. The aggregation was validated by interviews to marketing experts from two big companies of the poultry industry. Results The hedonic price analysis assumes a condition of competitive market equilibrium and that the price of one good results from consumer preferences for its specific attributes. In our model, broiler breast produced without antibiotics and with improved animal welfare standards benefits on average a 14.6% price increase with respect to similar products not claiming this characteristic. The attribute showing the higher impact on price is the “organic product” certification (66.4% increase on average). Other characteristics originating remarkable price increases are the cut in slices (+15.6%) and thin slices (+21.4%), producer brands (+18.6%) compared to supermarket and discount brands, and shop location in a metropolitan city centre (+12.4%). Conclusions The 14.6% average price increase for “antibiotic-free” products in the Italian competitive market of broiler breast is justified by the greater utility perceived by consumers. However, such an increase is about of the same size obtained by other more conventional marketing attributes, like the type of cut and brands. The rapid growth of “antibiotic-free” poultry meat supply in Italy may have already led consumers to consider this attribute as an almost ordinary feature of the product. The significantly higher prices paid for “organic” broiler breast is supposedly due to higher production costs and its destination to more willing-to-spend consumers. But it may also be assumed that consumers consider organic products as “antibiotic-free”, which is not true under the current EU regulations. These aspects should be further investigated.