Friday, August 03, 2007

If it's such a good idea, why isn't Diageo doing it already?

The latest proposed bullshit regulation isn't from the FDA, but the Treasury Department: labels on all alcoholic beverages that detail the alcoholic content, serving sizes and nutritional information.

Consumers are not coerced into buying a product and therefore accept all risks voluntarily, so why must government force the manufacturers to reveal everything? If I'm not certain what's inside something, such as sugar or fat content, then I simply don't buy it. Furthermore, most beverages already include a lot of the information. So why is Diageo pushing for this ruling? Isn't it already free to put such information on its own bottles already, setting a new standard by example?

But there's a good reason that an entrenched company will want to increase government powers over the products: the new regulations force competitors to spend more money. Standard Oil successfully lobbied for hefty fire insurance requirements (and supposedly burned down buildings to have an excuse for such regulations), which made it impossible for would-be competitors to enter the market. In this case, the increased cost is just slightly per bottle, but it's a not insignificant cost after millions of bottles and packages. Diageo's executives are probably counting on not spending as much as their main competitors will, under the new and quite unnecessary requirement.

2 Comments:

Blogger JMR said...

High regulatory burdens encouraged by existing industry players have kept my dear stevia in limbo for years.

Friday, August 03, 2007 2:26:00 AM  
Blogger ChrisJ said...

You can also apply the argument to workplace smoking bans... specifically nightclub/bar establishments.

If there was a huge market for a non-smoking bar, wouldn't there be investors fighting over themselves to open them?

Maybe I'm just too midwestern for my own good.

Wednesday, August 08, 2007 2:25:00 PM  

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