The European Food Safety Authority provides scientific advice on questions related to food and feed safety, animal health and welfare, plant health, nutrition, and related environmental issues, and communicates its findings publicly. When public health risks are detected in food, information is shared between the European Union member states so that they can take the appropriate measures, including withdrawal or recall. However, to further enhance product quality, safety, and acceptance, companies could have their food products tested and certified to ensure compliance with national or international standards. This additional cost would be reflected in a higher price for their products.

Discuss the implications of third-party testing on the moral hazard problem.