Tuesday 22 October 2013

Bootleggers and Baptists - calorie count edition

Bruce Yandle's model remains the most compelling explanation of nutty regulation. Take an interest group who'll profit by some regulation, combine it with a public interest group who can put a nice public interest veneer on it, and strange bad stuff can happen.

A couple years ago, it was "Standard Drink" labeling on alcoholic beverages. The public interest story was that people didn't know how much alcohol was really in the stuff they were buying and so need the standard drink labeling to help them out. So the "Baptists" wanted labels on every bottle of booze saying how many units of 10 grams of alcohol it contained.*

That's the public interest veneer. When you recognize that larger producers can spread fixed labeling costs over more units and that beverages from overseas often don't have "standard drink" labeling, the bootlegger story is more obvious.** Standard drink labeling is a way of imposing costs on smaller producers (to the benefit of larger producers) and of imposing a non-tariff barrier against imported drinks. I remember the craft beer importer on Papanui Road who manually had to print off standard drink labels to paste, one by one, to bottles of niche craft beers he brought in from overseas. He went out of business before the earthquakes, though likely because the New World across the street improved its craft beer offerings rather than because of the labeling regs.

Today's version: calorie counts. An AUT nutrition prof wants mandatory calorie counts kilojoule labeling on alcoholic beverages. No other country has calorie or kilojoule labeling requirements, or at least not according to this table. American calorie labeling is voluntary.

The least intrusive form of the regulation would simply have "calories from alcohol" labeling. That's a straight function of the number of standard drinks already on the label. Going beyond that to get accurate calorie counts whenever a small producer decides to brew an odd milk stout or add pineapple lumps to the brew and you're again working to impose fixed costs on small niche brewers and to impose a non-tariff barrier on imports.

If the government is determined to cave in to the healthists on this one, here's how to make it least harmful:
  • Exempt small-batch products;
  • Exempt imports;
  • Require vendors selling exempt products to put up a notice somewhere saying "The alcohol in one standard drink provides 290 kilojoules."
Update: Ha! Everything old is new again. One year ago, almost to the day, there was another push for calorie labeling on beer. Here's what I'd then said; glad to see I'm consistent.

* And, predictably, those who care about value for money find it easier to divide price by number of standard drinks than to run the more complicated "price divided by (volume times % alcohol).

** Worse, the UK uses an 8 gram (10mL) standard drink size. So a bottle of imported Guinness will have the wrong number of standard drinks. For the confusing morass of international alcohol labeling requirements, read this. Imagine setting up as a small producer and thinking about exporting. What kind of labels are you going to have to draw to be able to meet the requirements across a broad enough set of countries? What happens if you have a cancelled export order that you want to ship to another country instead but you'd put on the wrong set of labels?


  1. That craft beer importer was my friend Harvey Shepard. Leading factor was the global crisis, making local spending cuts, and then after that the New World improving their selection. All the shop across from the the mall were having a very rough time of it.

  2. I like nutritional value information about the stuff I consume. However I prefer to get it from the web, rather than on the item.
    From a beer point of view, nutritional value is not the (main) reason I consume beer.

  3. American bottle size requirements keep some very tasty liquor out of my hands. http://blogs.ocweekly.com/stickaforkinit/2013/01/white_house_petition_700ml_bottles_import.php

  4. He had a great shop; was a shame to see it go.

  5. I value the standard drink labelling that is available in Australia/New Zealand. Now that I am Canada I often find myself standing in the bottle shop trying to do the sums.

    The most valuable use of it is to provide a reasonable estimate of alcohol consumption for the purposes of determining whether I can/should drive a car. When they introduced the 0.05 BAC limit in BC a few years ago there was a lot of confusion about how much alcohol can be consumed and still stay under the limit - a widespread notion of a standard drink would have been helpful.