Why do Companies Fortify? Drivers of Compliance with Edible Oil Fortification in Bangladesh

Abstract

This study responds to earlier findings of suboptimal compliance with mandatory fortification of edible oil in Bangladesh. We aim to explain the root causes of poor compliance and to provide recommendations to strengthen the national fortification programme in Bangladesh and other similar contexts.

We outline the structure, processes, and dynamics of both bulk and bottled edible oil value chains, and we analyse the factors that drive or impede compliance behaviour among edible oil producers. Our research shows that the cost of premix coupled with competition on price negatively affect profit margins for both oil refineries and oil packers. Along with inadequate regulation of the market, this has a negative impact on compliance, particularly in the case of bulk oil. In addition, access to quality vitamin A premix from accredited suppliers is a particular problem for smaller oil packers. On the other hand, producers that are subject to a higher-than-average frequency of inspections exhibit more behaviours associated with compliance. This finding is based on an innovative compliance behaviour score developed for and applied in this study.

We conclude with five recommendations to improve fortification outcomes: introduce appropriate labelling to ensure that bulk oil is traceable; implement producer inspections at least quarterly, with greater resources to support this effort; strengthen penalties for non-compliance, along with positive reputational incentives; ensure that suitable premix is available to all producers; and strengthen and improve data-driven monitoring of compliance. Further areas of research should include the development of new and more efficient/effective regulatory measures, such as digital solutions or systematic producer behaviour monitoring.