Cloning: will it change the management of supply chains?

The announcement in February 1997, that scientists at the Roslin Institute, Edinburgh and at PPL Therapeutics had successfully cloned a sheep from another adult sheep raised many interesting questions. Ignoring the hotly debated and important ethical issues, this note explores the potential consequences of this breakthrough for vertical co‐ordination in meat supply chains. By reducing the biological variation inherent in animal production, cloning technology could allow the final quality of meat products to be linked more closely to managerial ability. It may result in closer contractual relationships between farmers, processors and retailers. This would bring with it, however, the problems of asset specificity and increased risks of opportunism for farmers if they invest in livestock with a specific genetic code for a single buyer. The purpose of this short paper is to raise interesting questions which bear further investigation rather than to offer definitive answers to these questions.