The most striking consequence of recent food scares was that food quality is no longer the concern of a single firm, but instead the whole food chain has to work together in order to deliver the new quality. For the agri-food business there is evidence that the majority of these more highly co-ordinated chain organisations are organised as vertical networks. The aim of the paper is to determine the degree of influence which the chosen quality strategy exerts on the vertical co-ordination mechanism. A theoretical framework has been developed based on new institutional economics and strategic management theory. The findings are used to analyse the Polish dairy sector and elaborate on the relevance of quality management for this sector.