17th Austrian Economics Monthly: Front-Of-Pack Nutrition Labelling

The European Commission has decided to present a harmonized front-of-pack nutrition labeling system, which if passed becomes mandatory across the EU. This labeling system should lead consumers to shift to healthier diets. Can this influence the freedom of choice? Three speakers were invited to express their opinion on this topic, and the result was quite diverse. The discussion was moderated by Simon Sarevski.

Pietro Paganini, the director of the liberal think tank Competere, claimed that this indeed has to do with individual liberty. For Pietro, this goal can be achieved through the rule of law, which could spur market competition and protect consumers from potentially harmful behavior.

The labeling on the front of the pack, on the other hand, was intended to serve as an impetus to encourage the consumer to adopt a certain purchasing behavior. However, Pietro disagreed with this decision. In his view, the labeling can be misleading and steer consumers in the wrong direction. This can significantly affect the freedom of choice and deviate from its objective. All information should already be included in the legal framework. He also disagrees that labeling tells people what is good and what is bad, and it can be debated whether this is an accurate, science-based tool. In conclusion, he stated that this system is outdated and the new era of personalized nutrition is upon us, which is the cornerstone of liberal freedom. This decision can have far-reaching effects in the shadow of the totalitarian system. Pietro referred to Hayek’s view that man is a very diverse and complex being and that it is difficult to control his behavior. Different diets have different effects on people’s well-being that cannot be controlled. The same is true for any tax on food or beverages.

Unsurprisingly, Katherina Keimelmayr, the Head of Corporate Communications & Public Affairs at Nestlé Austria, supported the decision about the front of pack nutrition labelling system as it aims at alleviating the consumer’s food choices. Transparency will allow consumers to take more accurate decisions and nudge them to more balanced diets. Katherina challenged Pietro’s opinion about the validity of science in this decision and claimed that several notable organizations and food agencies work on this case. The evidence supports this, Katherina said. On a side note: the Nutri-score is already being implemented in several countries. She denied that it aims to penalize Mediterranean diets. On the contrary, the Nutri-Score is very helpful in this case.

Bill Wirtz, a political commentator from Luxembourg, is hard to agree with both Pietro and Katherina. Reflecting Pietro’s words, he does not think the term “totalitarian” should be used. However, he does agree that there is a particular patronized hue there. He illustrated this example of the Nutri-score with Hayek’s famous pretense of knowledge. He coincided with Pietro about the distorted views when choosing a specific product. The problem is that the Nutri-score indicates the products’ nutrition value, not their health-based specifications. Labelling a certain group of products discriminates them compared to other products not involved in this labelling system, thus creating more divergence. Again, labelling products only for their nutritional value, and not for their actual health benefits, obscures the idea of this system. If the people are not already self-disciplined, it is easy to draw attention to the products that are to blame. In addition, this could be falsely generalized and embedded into next generations already, what’s good and bad, Bill claimed.

“We lobby for the specifics, but we lose the focus what is important“.

According to Bill, we can use the enhanced information technology to thoroughly inform ourselves before we decide. What is then the proper way of regulating food? Displaying accurate and essential information is one way to improve consumers’ decision. However, too much information presented on the package can only alienate consumers from buying that product.

The labelling could profoundly change the orientation of the food market, which will need to focus on reformulating products to get a better score, pushing producers away from the traditional production methods. Therefore, that reformulation can be costly and the compensating ingredients even less healthy than the ingredients normally used for the product. The information on the package should remain true using advanced technology, but it should be up to the consumer to decide. Not quality but quantity harms our health, Pietro claimed. This Nutri-score system could be next war of exclusion, as previous examples show.

“Europe should be more realistic in taking certain position and less visionary”, Pietro concluded. For him, the free individual decisions that are not supported or nudged by anyone make the notion of the free market and liberalism captivating.