Everything Wrong With Our “National Food Policy” in One Article

A piece of reporting on Washington Post’s Wonkblog Monday highlights and exacerbates many of the problems with the way the United States government treats commerce in meat products (and food generally). Let us treat this in the FJM-style and dissect it as we read (my comments in italics):

Major supermarket chains changed how they label meat, surprising customers and USDA

By Roberto A. Ferdman

Retired doctor Louis Offen and his wife have been shopping at the same Giant supermarket in Bethesda, Md., for nearly 40 years. Offen is in charge of buying the steak, which normally means combing the meat section for New York strip sirloins with the label “USDA grade choice,” the mid-level grade for meat. The cut is ubiquitous.

But one day last month, Offen was stumped. He couldn’t find any packages with a “choice” label. He couldn’t find lower-quality beef, called “select,” either. All he found was an unfamiliar blue crest that read “USDA graded” on every package of beef. “Isn’t all beef sold in stores USDA graded, making that label useless?” he asked.

The good doctor gets right to the heart of the matter, even though he doesn’t realize it. The truth is – all beef is inspected, so thus it is all safe (or at least as safe as you can trust USDA to guarantee that, more on that as we go). Our compelling narrative of a befuddled doctor could end here. Perhaps he could take his argument for more descriptive labels to the store. But, no, the federal government must do all and be all, so the retiree who worked in a government cartel industry his whole life leads us to a government goose chase for more regulation, and Wonkblog is ON IT!

In recent weeks, Giant stores nationwide changed their labeling procedures, making it difficult for customers to know the quality of meat. Rather than providing different options, the company labeled meat simply as “USDA graded” — a description that applies to all but a tiny amount of meat approved for sale in the United States.

Larry Meadows, a Department of Agriculture official who is one of the people charged with overseeing the nation’s meat supply, said in an interview that the action was problematic. “We’ve never seen anyone use anything like the ‘USDA graded’ label before,” said Meadows, associate deputy administrator of the USDA’s livestock, poultry and feed program. “The label is truthful, but it’s also misleading.”

So the truth is no longer enough for the government agency to determine – it must also include a value judgment. Now, I am highly skeptical the government can do much in the former role (assuring us our food is safer than it would be without USDA/FDA regulations), but even the most ardent pro-government progressive has to admit value judgments are touchy things right? If we can’t allow “government” to determine who we marry (so the reasoning goes), why do they get to delineate the quality of our meat supply?

Meadows said one reason a company might use a more generic label is to save money, or to blur the impact of introducing an unusually high amount of lower-quality beef.

Notice the government regulator automatically assuming malfeasance on the part of the business and its employees. This is the mindset that underlies our entire regulatory state – without the white-hat government officials to counter the black-hat corporate profit-seekers we would live in a Dickensian state with no protections while teetering on the edge of environmental and societal collapse. James Q. Wilson’s public choice theory has gone a long way in discrediting this notion, but there is much work still to do. Note the use of “one” above too, because Meadows totally undermines this further on, something our author, Roberto Ferdman, has chosen to withhold for now.

Giant’s corporate parent, Ahold USA, which was ordered to stop the practice, acknowledged the change in labeling at its stores, which include Martin’s, Stop ’N Shop and the grocery delivery service Peapod.

This paragraph pushes the trite corporation-vs-government narrative in subtler ways, by framing Giant as this faceless corporate entity owned by a blandly named “parent” company, which also happens to own a number of other grocery stores (that you should consider boycotting, stay tuned!). The fact that grocery chains are consolidated under a few conglomerates will come up at the finale of this analysis as well, as it is a real problem.

Tracy Pawelski, a top spokeswoman, said the new label was part of a brand rollout, but the firm later learned from regulators that it was “not permissible” because it did not tell customers the quality of meat. “We apologize to customers for any confusion caused by this labeling error,” she said in a statement.

Having gotten their mandate from the likes of Dr. Offen, USDA has gone ahead and assumed the role of meat rater on top of inspector. Those should be two very separate endeavors, as one clearly has no compelling public interest, but such is the reality of our modern regulatory state — your local grocer must advertise the USDA’s opinion of the “quality” of its meat or face fines and criminal action.

As of Friday, the label was still in use. Pawelski said the company aims to put new meat labels in place this week.

A national problem of mislabeling food

What transpired at Giant and its sibling companies reflects what food safety experts say is a growing concern about food and supplement manufacturers misusing labels. The experts say that labels are supposed to allow customers to make more informed decisions, often granting a distinction of quality or making claims about health and safety, but they have instead turned into advertising vehicles.

“Food labeling has become an incredibly powerful marketing tool,” said Bill Marler, a lawyer and food safety expert who regularly represents consumers in claims against food companies.

Bill Marler is not a disinterested party to the regulatory food world. He is a fame-hungry “super lawyer” who has sued restaurants, grocery chains, and nearly anyone else involved in delivering you the nutrition necessary to live. He picks the hyped-up food scare du jour and starts the litigation that leads to disproportionate civil settlements and government grabs of power that increase prices while reducing freedom and innovation in the food sector. Despite all his self-proclaimed “success,” he ironically cites as his major accomplishments his role in a 1993 E. Coli scare AND a 2007 E. Coli case – so he is either a terrible public policy advocate or (shock!) the government can never adequately screen food to ensure 100% safety, despite its massive power over the food supply.

Food packaging, in particular, has been blamed for alleged customer misinformation. Recently, PepsiCo decided to strip “all natural” claims from its Naked Juice line, saying that the products are natural but that it needed more regulatory guidance. Kellogg’s did the same for some of its Kashi products, while saying it stood by its advertising. Both companies faced lawsuits accusing them of misleading customers.

In 2010, the Food and Drug Administration issued warning letters to 17 food manufacturers, mandating that they correct labels that made unfounded health claims. That same year, Dannon agreed to a settlement with the Federal Trade Commission over claims it made about the health benefits of its yogurt.

The number of food labels has skyrocketed in recent years, often using dietary, nutritional and cultural trends to nudge consumers to buy a specific good.

Bet you wonder how this has worked out, huh? Think all the “information” provided has led to anything positive in a) the national health or b) your costs at the grocery store?

In 2010, nearly half of all new food and beverage products came with a health- or nutrition-related claim, up from 25 percent in 2001, according to a report by the USDA’s Economic Research Service.

Today, the food industry sells $377 billion worth of food labeled with the 35 most common claims, including “natural,” “organic” and “carb conscious,” according to data from the market research firm Nielsen.

Oh, and nearly $400 billion in commerce is done under the government-regulated labeling? I’m sure it will be easy to pry apart Big Government and Big Food to eliminate these then, right?

“Companies have always tried to make their food sound as attractive as possible without violating any laws or regulations,” said Michael Jacobson, the executive director of the Center for Science in the Public Interest. “Labels have become a battleground where companies use every trick they can muster, which is a problem because consumers tend to be naive.”

And here comes the progressive Science® lover who think the unwashed masses are too stupid to buy their own food. Mr. “Public Control Interest” is here to tell you rubes how and what to eat – what’s “all-natural,” “organic,” “fat-free,” or “healthy.” 

Food and beverage manufacturers disagree, insisting that labels reflect a desire to provide customers with better information about what they’re buying.

“The primary purpose for claims and nutrition symbols used on food labels is to provide positive dietary guidance,” said Brian Kennedy, director of communications for the Grocery Manufacturing Association, which represents hundreds of food companies. “There is a robust regulatory system in place to ensure the proper use of claims and other symbols on food labels.”

The Big Food lobby supports labels from Big Government because it creates a barrier to entry. Try to start up your own slaughterhouse and you will quickly become frustrated with the impossible number of regulations foisted upon you. This results in less innovation, but big businesses get predictable profit margins and the USDA regulators have less work to do as they oversee a smaller number of plants.

How the USDA learned about Giant’s change

The USDA received its first complaint about the new Giant label on Sept. 22, according to the agency’s Meadows. More queries came flooding in.

I cannot imagine what normal person reports to the USDA on their grocery store, probably while quaking in fear they may die without the proper sticker from their federal regulator. From the USDA site, it takes clicking through three webpages to get redirected to an alternate site for the complaint form, which is a 6-step questionnaire. Only in DC, where everyone is a bureaucrat or an ally of them, could Giant cause a “flood” of complaints.

The USDA grades beef and regulates labeling practices. By law, all beef sold in the United States must be inspected for health safety. For an additional fee, the USDA will grade the product, based on a series of guidelines including tenderness, juiciness, flavor and marbling (the distribution of fat).

The practice, while optional, is effectively an industry standard. About 94 percent of beef sold in the United States is graded, Meadows said.

AND WE COME TO THE CRUX OF THE STORY. Our intrepid Wonkblogger has misled us down a rabbit hole about the regulatory state and the faux offenses of Giant. Instead, what we have is a regulatory agency pissed off that a retailer found a way out of doing what the government thought they should. As opposed to the greedy, shadowy corporation out to harm you and sell you inferior meat, maybe the grocery chain, pressed to make a buck on meat at a time of record high prices, thought that by skipping PAYING FOR AN OPTIONAL INSPECTION they’d save their customers some cash. It is an outlandish thought to our fact-based blogger that perhaps a profit and food safety are not mutually exclusive and/or the optional tests at USDA are just that – optional!

“Choice” grade beef is high quality, and “very tender, juicy and flavorful,” according to the USDA. “Select,” meanwhile, is less tender, has less marbling, and “may lack some of the juiciness and flavor of higher grades.”

Meadows said he didn’t immediately have answers for those who complained, because, like them, he was surprised.

When he reached out to Ahold, the parent of Giant and its siblings, the company’s head of compliance pinned the labeling switch on Ahold’s marketing team, Meadows said.

“He indicated to me that the marketing team came up with the brilliant idea, as he called it,” Meadows said. “But he also agreed that they weren’t being as transparent as they were in the past.”

Meadows said Giant may have seen an opportunity to package different grades of beef with one label, rather than two. Doing so could save the company money by allowing them to store all of its packaged meat together, he said.

So it sounds like Giant had a marketing solution based off an idea to save money on logistics, while avoiding an unnecessary testing of their meat that simply added costs to the end product. Imagine that…

Meadows also said changing the label would prevent a broader negative reaction from customers if the company was using more low-quality meat.

“We knew nothing about the new label, because it was changed without our knowledge,” he said. “It took us by surprise. It wasn’t common at all, it wasn’t normal.”

“Not normal” is usually what you hire your marketing company to produce, no?

Within days, Ahold committed to addressing the issue. Giant is reverting back to its previous practice, whereby most beef is level “choice,” and labeled as such. The retailer also will sell the lower-quality “select” grade.

Pawelski, the Ahold spokeswoman, said the new labels came on Butcher Shop brand meat. The new labels will be “clear to customers and in full compliance with USDA standards.”

This is why we can’t have nice things — because ignorant media types will hype up regulatory power trips into “health and safety” scares that result in a large corporation caving because steady profits are more important than innovation.

Offen, the meat buyer in Bethesda bewildered by the new label, is now a little bit more distrustful of his longtime supermarket.

“It lessened my faith in the company, in the brand,” he said. “But what can you do? It’s not like there are many other options. I’m not even sure what my alternatives are.”

Lack of options notwithstanding, Offen has shied away from buying beef at Giant. He doesn’t plan to resume his habit of purchasing New York strip sirloins until he knows he isn’t getting the lowest quality meat.

“I’d think twice about buying meat there at all,” he said.

And now the lesson from all this: The current food industry is an abomination of regulatory agencies and command-and-control practices handed down from the early 20th century – a time of two world wars and a heyday for aggressively proactive government. The seizure of private farmland and the declaration that anything produced on a farm was a-okay to be regulated to death (see Wicker v Filburn) was unconstitutional and anti-liberty enough in its own day, but today it is especially anachronistic as our global food chains can ensure access to quality, healthy food year-round. The regulatory state of the USDA and FDA squeeze out space for innovation and start-ups, leaving only giant corporate conglomerates that do not have the desire or motivation to think outside the box. And when they do, they get crucified by reporter-bloggers with a progressive agenda and retirees who are scared of change.

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