In the comments to yesterday’s post about food regulations, my friend David distinguished rules that limit consumers’ choices (bad) from rules that give consumers more information (good). I agree that the former are worse than the latter, but I’m still skeptical of both. That’s because information isn’t free. Labeling and sorting cost money. Some information is obviously good, but how much? The answer isn’t always “more.”
The solution is to treat information like any other good, subject to the workings of supply and demand. Experience shows that when consumers demand specific information, producers are glad to provide it. “Atkins friendly” and “trans fat free” foods are two recent examples of labels responding to diet concerns. The extremely specific details of origins and processes that go onto many artisanal goods tap into the desire for information at a higher level. Granted, markets don’t always deliver perfect results, but they usually do better than government regulators. Generally the best way to arrive at the optimal communication between producer and consumer is to let the market sort it out.
In yesterday’s post we were talking about origin labels for meat and other products, but a proposal to require detailed nutritional information on alcoholic drinks demonstrates the problem even more clearly:
The Treasury Department is considering a new rule that would require companies to put alcoholic content, serving sizes and nutritional information on all alcoholic drink packaging.
According to the proposed rule being published Tuesday for public comment, labels on all alcoholic beverages – from beer cans to wine bottles – would include a statement of the drink’s percentage of alcohol by volume.
The labels would also include a “serving facts” panel, which would list the number of calories, carbohydrates, fat and protein for a standard serving size.
This would be a reversal of current laws that actually prohibit distillers, vintners, and brewers from putting this kind of information on their bottles. Among the groups advocating the change is Diageo, the world’s largest liquor company:
Diageo North America has listed nutritional information for its alcoholic beverages on one of its Web sites for the past two years because it was illegal to put such “serving facts” on the label.
Yesterday, the Norwalk-based unit of the world’s biggest liquor company praised the federal Alcohol Tax and Trade Bureau for issuing a proposed regulation requiring serving facts labels on all alcoholic beverages.
Diageo, joined by the National Consumers League, the Center for Science in the Public Interest and other consumer groups, initiated a movement in 2003 seeking a uniform facts label…
“Consumers want more information – not less,” said Guy Smith, Diageo North American executive vice president, in a statement. “Today marks a major victory for consumers and a win for our industry. We are one step closer to providing consumers the information our research tells us they overwhelmingly want about carbs, calories, alcohol content and alcohol per serving size.”
If Diageo wants to put nutritional information on its labels, it’s stupid to forbid them from doing so. That part of the current law should definitely go. But Diageo wants more than that. They want everyone to be forced to follow their lead. Why? Are they that concerned about public health? I doubt it.
When you’re a massive corporation like Diageo selling standardized products around the globe, providing detailed nutritional labels is pretty easy. But for smaller craft producers, obtaining that kind of information could be more expensive and time consuming. Perhaps the folks at Diageo are just looking out for consumers’ interest, but it seems a lot more likely that they’re lobbying to get regulations in place that are light on them and burdensome on the little guy. Throw in the seal of approval from CSPI and it’s a classic case of bootleggers and Baptists each getting what they want: the Baptists provide the moral reasoning for the law while the bootleggers reap the financial rewards.
David recognizes that this sort of thing is a problem, but suggests we regulate better, not less. I’m not convinced that’s possible. If even a proposal as seemingly benign as putting calorie counts on a bottle of wine is going to be corrupted by special interests, the problem is endemic to regulation.
Whether it’s calorie counts in fast food restaurants or nutritional labels on wine, the best way to defend consumer interests is to remove barriers to communication. Let Wendy’s advertise healthy salads and let Diageo market low-carb wines* — and allow talented chefs and artisan drink producers to focus on their work, not their paperwork.
[For more discussion of the proposed regulation, head over to Tom Wark's great wine blog. Note also his mock-up of what new wine labels may look like, with the space that could have been used for interesting information or design taken up instead by an ugly nutrition table.]
*All wines are low-carb, silly! But Diageo knows mass marketing.