Wednesday, January 24th, 2018

USDA Rule Undermines Organic Wine

January 7, 2011 by  
Filed under Featured Story, Labeling, News

Many U.S. winemakers around the world like to label their products as “organic,” but few actually do.  That’s because the U.S. Department of Agriculture (USDA) defines “organic” wines as those that contain no “added sulfites,” a requirement that makes little sense. For details, see yesterday’s coverage in the Los Angeles Times and the The Gray Market Report.  Both demonstrate why quality winemaking requires sulfites and why consumers  shouldn’t fear them.

However, the labeling issue is larger than the sulfites debate; it highlights a fundamental problem with labeling mandates in general.  Specifically, private certification organizations do better than government regulators in defining and certifying product claims.  That is why many companies–and even government agencies–voluntarily rely on private certification for a wide range of activities from “green” building to product safety standards.  And competition between standard-setting organizations creates more options and information for consumers and businesses.

A Cato Institute study, Private Regulation:  A Real Alternative for Regulatory Reform, provides an example of how this approach works in the electronics industry:

Today, it is almost impossible for a producer of electric appliances and equipment to claim that its products are safe without the approval of Underwriters Laboratories (UL), an independent third party. Retailers, customers, and even insurance agencies look for UL approval. UL enforces high standards for product safety without government regulation, benefiting both producers and consumers.

In fact, such mandates replace more effective private certification systems, which my colleagues Gregory Conko and Sam Kazman explained in public comments when USDA proposed the organic rule in 2000:

USDA’s proposal [set set standards or “organic” food labeling] attempts to impose a uniform, highly technical standard on an issue and an industry which are incapable of precise definition. Moreover, USDA’s proposal would prohibit private parties from engaging in practices that encompass any variation in applying this standard. It would prevent certifiers from requiring practices that are greater, lesser, or in any way different from USDA’s uniform standards. There is considerable evidence that consumers of organic products hold a wide range of opinions regarding what constitutes organic production. Consequently, by prohibiting variability or flexibility, USDA’s proposed rule would prevent producers from responding to consumer preferences and would directly harm consumer choice.  Furthermore, by drastically restricting the information which food producers can provide to consumers, USDA’s proposal raises serious First Amendment problems.

History proves Conko and Kazman right.  USDA labeling rules undermine the ability of winemakers–and other organic farmers–to communicate valuable information.  The regulations also diminish opportunities for private organizations to help define “organic wines.” As a result, few use the label and consumers have less information, which is the opposite of what policymakers intended.

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