Institutionalisation of organic labelling in the People’s Republic of China

To facilitate more sustainable consumption and production, multiple product labelling schemes have been implemented in the People’s Republic of China. The effectiveness of these schemes has been limited however, not only in their acceptance by Western markets but also in meeting their aim to target a rising Chinese consumer class. Previous studies in Western contexts suggest that the institutionalisation of product labelling schemes is driven by a dynamic construction of legitimacy between various actors from across the consumption and production system (Dendler, 2013a; Dendler, 2013b). Yet there is a dearth of in-depth studies of the causalities behind the institutionalisation of Chinese product labelling schemes, especially those that shed light on causalities across different institutional contexts. This paper seeks to address these gaps through an in-depth study of the legitimacy construction and institutionalisation of the Chinese organic labelling scheme in two contrasting consumption and production systems. The Chinese dairy and potato sectors differ not only in terms of their production and distribution system (PDS) characteristics (e.g. degree of consolidation at different stages of PDS, size of import vs export market) but also their institutional context on the consumption side, which may have implications for the institutionalisation of product labelling schemes. From a theoretical perspective, the work is framed by new institutional thinking, in particular around the notion of institutional entrepreneurship and institutional change, as well as concepts of legitimacy from the governance and organisational studies literature. Empirically, each case study draws upon secondary review of academic and other relevant documents, such as policy reports and plans, administrative documents and organisational reports and in-depth interviews with experts from across the dairy and potato consumption and production systems in China. Our analysis shows how in the increasingly concentrated dairy PDS powerful initiatives driven by manufacturers coupled with strong health associations related to dairy product consumption, and a prominent discourse around the safety of dairy products, has resulted in the increased diffusion of the Chinese organic label. In contrast, the Chinese potato consumption and production system, with a much more fragmented PDS and couched within a less favourable normative and discursive setting, has seen less strong diffusion dynamics in recent years. Our paper illustrates how key legitimacy actors and other drivers of product labelling institutionalisation processes can differ substantially across different product groups making not only an important contribution to the new institutional and governance literature but also helping certification and labelling practitioners to make crucial strategic adjustments.