Later On

A blog written for those whose interests more or less match mine.

Food producers hate being required to give consumers information about the food

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Food producers are all for “voluntary guidelines” because then they can simply refuse to volunteer: voluntary guidelines are abandoned in exactly the circumstances in which consumers would want them followed. The solution is regulation: rules backed up with the force of law. But every step meets fierce resistance from businesses. (Safety glass in US automobiles had to legally required, window by window: the manufacturers simply would not do it until it was a legal requirement. So also with seat belts, back-up lights, etc. Of course, the regulations didn’t say that a car should not explode into flames on low-speed impact, so Ford put out the Pinto, which burned various customers to death—but the company had estimated the likely number of deaths and the likely costs of settlements, and that, unfortunately for the victims, turned out to be less than it would cost to build the cars so they wouldn’t burst into flame. This all came out at the trial, but of course no Ford employee was punished. The company simply wrote a check to pay the fine, and still came out ahead. All’s well that ends well, eh?) The point is that businesses will constantly search for ways to cut costs and boost profits, and regulations must be well thought out and rigorously enforced or consumers will suffer. (Here’s a sterling—well, at least aluminum—example. More information in this post.)

Food producers fought bitterly to avoid listing ingredients on the package. Indeed, some would print the ingredients list in (say) pale yellow on paler yellow, or hid the list in a fold of the package. Much fun was had some decades back in Congressional hearings as members of Congress trotted out examples from their local stores. So finally the ingredients list was legally required. Same with the Nutrition Facts labeling: food companies hated it, but the law went through and I find I use both kinds of information—the list of ingredients and the Nutrition Facts—more or less constantly. Example: if a product contains high-fructose corn syrup, I don’t buy it. I find some other solution, up to and including homemade. We avoid wheat because The Wife cannot eat it.

Now there’s a proposal to label meat showing the country in which it originated. OMG, you would think it’s the end of civilization. Why on earth should producers want to avoid labeling the country of origin of meat, fish, and fowl? Well, because some countries (China) have had serious problems in their food supply, so if one has a choice, one might want to avoid foods from there, at least until they get their act together. Also, some Americans want to buy products that come from the USA. Is that so bad?

Rob Hotakainen writes for McClatchy:

After surviving years of drought and watching the size of the U.S. cattle herd fall to its lowest level in more than 60 years, Texas cattleman Bob McCan would just as soon steer clear of the U.S. government’s latest meat-labeling rules.

For many U.S. consumers, it’s a popular idea: Label packages to let them know what country the meat comes from.

But with his herd of roughly 4,000 including cattle from Mexico, McCan said there’s no good reason to segregate the animals when he sells them. All it would do, he said, is create hundreds of millions of dollars of extra handling costs that would get passed on, driving up the price at grocery stores.

“We don’t want beef to become a luxury item,” said McCan, a fifth-generation rancher from Victoria, Texas.

McCan, now the president-elect of the National Cattlemen’s Beef Association, is among a group of cattle producers and meat companies that has sued the U.S. Department of Agriculture for moving ahead in late May with new country-of-origin labeling rules.

In a lawsuit filed July 8 in U.S. District Court in Washington, the groups claim the labels will hurt beef exports and are unconstitutional as “compelled speech” that doesn’t advance a government interest.

Backers of the new rules, who say labeling can be done at a minimal cost, are braced for another battle with cattle producers.

“They’re totally wrong – consumers have the right to know where products are from,” said Joel Joseph, chairman of the Los Angeles-based Made in the USA Foundation, a group that promotes labeling and products manufactured in the United States. “It’s not forced speech. It’s just consumer information, the same kind of information that’s on a label of a new car that says where an engine’s from.”

He offered some advice for McCan: “If he doesn’t want to segregate his cattle, then he shouldn’t get cattle from Mexico.”

McCan said labeling is a marketing issue that should be left to the private sector.

“We’re not anti-labeling at all,” he said. “We just kind of feel like the government doesn’t really need to be in our marketing system. It doesn’t have to be dictated to us.”

Cattle producers aren’t the only unhappy ones.

The new labeling rules also could ignite a trade war with Canada, which is threatening to retaliate. Last month, the Canadian government called the new rules a “protectionist policy” that discriminated against foreign competition. Ottawa said it might respond by imposing tariffs on a long list of products, including pork, fruits and vegetables, pasta, chocolate, cheese, office furniture and many more. The Canadian government fears that its beef exports to the United States would decline under the new rules, with U.S. retailers more likely to reject foreign meat.

Canadian officials immediately complained to the World Trade Organization, but they say it could take more than a year to resolve the case.

As a result, John Masswohl, director of government and international relations for the Canadian Cattlemen’s Association, called the new rules a tactic by the U.S. Agriculture Department “to buy themselves another year of discrimination.”

And he predicted that the threat of tariffs will quickly affect U.S. businesses.

“If the market thinks tariffs are coming, businesses make plans to adjust,” Masswohl said. “So my feeling is that if you are a producer of one of the products on that list, your banker might have some issues with your line of credit.”

The issue has become tortuous for the Agriculture Department, which last year got sued by labeling proponents who accused the government of dragging its feet on adopting new rules.

And for consumer groups, labeling has become the issue that never goes away, even though it wins strong backing in polls.

“I thought we were done with it, and all of a sudden it’s still going on,” said Chris Waldrop, director of the Food Policy Institute at the Consumer Federation of America.

But he said industry groups have opposed country-of-origin labeling since it first appeared in Congress’ farm bill more than a decade ago.

“They’ve been trying to delay it ever since,” Waldrop said. “This is just another effort to do that, but the public is not on their side on this. . . . Consumers want more and more information about where their food comes from and how it’s grown, and not less.”

He cited a poll released by the Consumer Federation in May, which found that 90 percent of Americans back mandatory labeling of meat products. . .

Continue reading. One interesting statement for a meat producer: “They might say they care, but most of them really don’t care what country it comes from. Beef is beef.” Well, since customers don’t care, why is the meat industry fighting the labeling requirement? Their story doesn’t hold water.

Written by Leisureguy

22 July 2013 at 2:34 pm

Posted in Business, Food, Government

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