Michelle Minton

Post image for FDA Trans-Fat Ban Sets Stage to Target Sugar, Salt, and More

On November 7, the U.S. Food and Drug Administration  announced plans to change its classification of trans-fatty acids and remove the designation “Generally Recognized As Safe.” If enacted, this change would result in a de facto ban of synthetic trans fats. In practice, this means food manufacturers would need to prove to the agency the use of trans fats would not have any adverse health effects before products containing them could enter commerce.

The de facto ban on trans fat’s GRAS status signals a sea change in the agency’s approach to food-safety regulation. Historically, the FDA has banned only additives and products that could be acutely dangerous to public health. FDA attempts to limit other ingredients, such as salt and sugar, have met public backlash, but it’s unlikely many will step up to defend trans fats, considering the scientific evidence that seems to link its long-term consumption with a slightly increased risk of cardiovascular disease.

Since almost any food can become dangerous if consumed in excess over an extended period, this move would set a precedent for the FDA to go after other food ingredients. Unsurprisingly, self-styled “public health” advocates — always at the forefront of nanny state regulatory efforts – are elated at this prospect.

Ironically, the increase in the use of trans-fats can be credited in large part to advice and advocacy efforts by these same groups. As Olga Khazan at The Atlantic notes:

In the 1980s, some scientists began to associate heart disease with saturated fats, and in response, groups such as the Center for Science in the Public Interest and the National Heart Savers Association  began to hound manufacturers for “poisoning America … by using saturated fats,” and as a result “nearly all targeted firms responded by replacing saturated fats with trans fats,” as David Schleifer wrote in 2012 for the journal Technology and Culture.”

In 1988, the Center for Science in the Public Interest published its report, Saturated Fat Attack, which described trans fats as “more healthful,” something we now know not to be the case. Research has shown that saturated fat is far from being “poison,” and that trans fat isn’t exactly health food. Then, in the mid-1990s, CSPI petitioned the FDA to add trans fat to nutritional labels on food products, which enables consumers to decide for themselves how much trans-fat is too much.

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Post image for CEI Study Supports Tax Cuts for Beer

If you’ve read Lauren French’s Politico article on the two beer tax reduction bills currently under consideration in Congress, you might think that the Competitive Enterprise Institute views the bills as a threat to federal revenue, Brewers: Tax cuts good for what ales us (October 30, 2013). Let me set the record straight: as we state in our paper BEER and Small BREW Can Be Good for Youwe believe that in the short term the BEER Act, which reduces the federal excise tax for beer producers big and small, will be a boon to the nation’s economy, but that the ideal course of action is to repeal the Federal excise tax on beer entirely.

The federal beer excise tax was first enacted in 1862 to help pay for America’s massive debt after the Civil War. It should have been repealed in 1933 with the repeal of national prohibition and the passage of the 21st Amendment that turned over authority to regulate intoxicating liquors to the states.  But more than 150 years later the beer industry is still saddled with the tax in addition to the state excise taxes, federal business taxes, state business taxes, and sales taxes that have been added since—all of which make the business of beer more costly and increase the cost consumers have to pay. All told, taxes now account for almost half of the cost of a beer.

The two bills before Congress seek to lessen the burden on brewers. The Small BREW Act (S. 917, H.R. 494), would reduce the federal excise tax for small brewers only (which it defines as those making less than 6 million barrels a year) while The BEER Act (H.R. 1918, S. 958), would reduce taxes for all brewers. French stated in her article, “The Competitive Enterprise Institute estimates the BEER Act would result in a loss of revenue to the government of $1.68 billion a year. The paper estimates the Small BREW Act would reduce tax revenue by $65 million a year.” To correct this statement, our paper notes that the bills will return this amount to the American economy. While the bills reduce the direct revenue paid to the Federal government, that money will be rerouted to state economies, spent on equipment, potentially new employees, and put back in consumers’ and business owners’ pockets.

As we’ve written plenty about, “sin taxes,” which attempt to modify consumer behavior by raising the cost of so-called “bad” products, have been shown to be ineffective and often have very negative unintended consequences. Furthermore, we believe that attempting to socially engineer Americans’ beer drinking is not something our Federal lawmakers ought to be dabbling in. As noted in our paper, while either of the beer bills will be a boon to the business of brewing, we slightly favor the BEER Act in the short term, for the simple reason that it does not discriminate between large and small brewers; it cuts the Federal excise tax across the board. However, if we truly want to create a “fair playing field” in the beer business we ought to expunge completely the federal excise tax on beer and for that matter all alcohol.

liquorIn the lead up to Washington State voters approving privatization of liquor sales in the state, opponents claimed—as they always do—that the increased availability and lower prices would undoubtedly result in increased rates of crime, alcohol-related auto accidents, and greater numbers of minors having access to alcohol. The number of outlets in the state has soared (consumers can now buy liquor at more than 1,600 retailers compared to 329 state-run and rural contract stores before) and while there were some reports that liquor thefts might have increased, according to the Washington State Patrol, most alcohol-related arrests have declined since privatization went into effect on June 1, 2012.

WSP data shows there were 2,861 DUI collisions and 21,941 DUI arrests during the 2008-09 time period. Under the first year of privatization those numbers were down to 2,347 DUI collisions and 19,703 DUI arrests. Statistics for “minor in possession” showed an even bigger improvement with 1,483 cases between 2008-09 dropping to 777 during 2012-13.

Similarly, the rate of minors caught with alcohol has declined. While opponents of privatization claimed that state liquor store employees were better equipped to prevent such activity, it seems that private retail workers have been doing fine, better than fine, actually.

According to a new report from the Washington Policy Center:

Judging from the first year of data, the private sector has stepped up to this challenge. According to the WSLCB’s “Compliance Rates for Retailers Since 2012,” those private sector stores with at least 10,000 square feet (as required by Initiative 1183) or former state contract stores have averaged just over a 92 percent compliance rate. The most recent check for August 2013 showed a compliance rate of nearly 94 percent These numbers do not show a significant drop in compliance rates with private liquor sales.

What could explain the drop in alcohol-related criminal activity? While many public health advocates believe that increasing alcohol outlet density (the number of places one can buy alcohol in a square mile) will automatically increase the rate of alcohol-related injuries and crime, some researchers have found that this isn’t so.

In his 2003 study, economist Patrick McCarthy examined 111 California cities and found that a higher number of take-away alcohol stores actually correlated with decreases in fatal and nonfatal alcohol-related car accidents. And in her 2010 study, Tenaya Marie Sunbury, a Ph.D. candidate at the University of Michigan, found that higher alcohol retail density actually correlated with lower alcohol consumption, lower rates of binge drinking, and fewer rates of drunken driving. Her hypothesis, which seems likely, is that more stores nearby mean that people have to travel shorter distances to buy their alcohol and may not have to drive at all—decreasing the likelihood of these consumers driving while intoxicated. In the case of Washington, now that consumers can purchase their liquor while they do their food shopping, the likelihood that they will be sober when they do their alcohol purchasing is greater.

After privatization, the variety and availability of alcohol increased across the state, and while prices also increased (a result of the increased taxes the privatization bill put on alcohol sellers) those prices do appear to be dropping back down to pre-privatization levels.

The moral of the story is that the consequences of any regulatory change are quite difficult to predict. Attempting to engineer consumer behavior through policy is at best unlikely to work and at worst likely to have negative effects that nobody saw coming. The soundest course of action is to leave people free to make their own choices about how they live their lives.

katy-perry-roarNo, of course not! However, a coalition of health advocates seems to be making that assertion when they sent her a letter this week asking that she relinquish her sponsorship of Pepsi because, they insist, its deviously effective marketing of soda to children is a cause of childhood obesity.

Never mind that childhood obesity rates are declining around the nation among all socioeconomic levels, the cause of obesity is not and never has been advertising. Additionally, the solution to any health problem our nation faces is not in the marketing of high-calorie foods. The real problem is that adults — specifically those with the responsibility of raising children — have abandoned their responsibility to instruct children about how to make healthy choices. The only way to inoculate a youngster from the relentless and ubiquitous marketing for less-than-healthful foods is to show them how to make overall healthy diet decisions.

On the other hand, quieting the marketing of a single high-calorie product will do absolutely nothing to address the problem of obesity in America. There are a million other options on store shelves; if a brainless zombie teen is at the mercy of commercials featuring pop stars, then they will simply be pushed toward a different ad and a different product with equally high sugar content.

At least, for its part, Pepsi as a company has been slowly making its products healthier and expanding its line of healthier alternatives. Other companies, like Kellogg’s, have used their profits and their celebrity sponsors to fuel campaigns that encourage youth sports. While it’s questionable how much these strategies will address obesity, they are certainly more effective than simply demonizing celebrities who endorse products.

Katy Perry, whose lyrics often promote a positive message of strength and self-confidence, is arguable a better role model for teens than many of the other performers out there. Obviously, she is free to decide which products and companies she wants to endorse. Of course, if and when Perry decides to end her sponsorship, Pepsi will certainly find another celebrity to take her place. Maybe Miley Cyrus would be interested in the job.

Post image for Loosened Laws in New Jersey Result in Brewery Boom

Only a year after New Jersey Governor Chris Christie signed a bill into law that would allow breweries in the garden state to sell beer on their premises, the Garden State has experienced a growth spurt in its craft beer scene.

Bills S-641 and A-1277, which were signed into law in September 2012, make a number of changes for both microbreweries and brewpubs that enthusiasts had hoped would put the state in a better position to compete with its neighbors. New Jersey is ranked as the 34th state in the nation for craft beer production, while Pennsylvania takes the number two spot, New York is sixth, and Delaware is 16th.

Unsurprising for those of us who study of free market economics, the relaxed laws have spurred growth. At least 15 new beer-producing businesses are set to come online in New Jersey by next summer! This makes sense since starting up a production brewery or a brewpub is risky and has a large initial investment; the old rules made it difficult for a start-up brewer to make ends meet and limited existing breweries’ ability to grow.

Up until the law changed, craft breweries — those that produce less than six million barrels a year — were only allowed to give away beer to visitors on a tour of the facility, and even then they were limited to no more than four two-ounce samples. Additionally, if those visitors wished to buy some brew to enjoy at home, they were limited to two six-pack’s worth. With the new law, breweries can now sell full pints at the brewery and customers can buy a keg’s worth of beer (15.5 gallons) for consumption off-premise.

The bill also made some changes for brewpubs (restaurants with a breweries attached). Brewpubs can now produce up to 10,000 barrels of beer instead of being limited to just 3,000. The new law also raises the cap of how many brewpub licenses a business can hold — it is now 10 instead of the previous two licenses. Finally, and perhaps best of all, the laws now allow brewpubs to sell their beer to wholesalers so that it can be distributed to stores around the state and restaurants beyond their own.

These changes mean good things for both existing New Jersey beer producers and those hoping to get into the business. For those already operating, the new laws make expanding the business and revenue much easier. For would-be Jersey brewers, the new laws will help them to earn revenue in their early years, which is especially important in the Garden State, where obtaining a liquor license is particularly difficult and extraordinarily expensive.

The high cost and tight supply of liquor licenses is a barrier for would-be brewpubs.

It was for that reason Peggy Zwerver and Tom Baker left New Jersey after developing a cult following for their Ocean Township-based Heavyweight Brewing. Looking to open a brewpub, they were stunned by the hundreds of thousands of dollars they’d need to pay for a liquor license in New Jersey. So they opted for Philadelphia instead, with its abundant and relatively cheap licenses, Zwerver said. After opening Earth Bread and Brewery in 2008, they haven’t looked back.

Hopefully, the obvious benefits of loosening these beer laws will demonstrate to more lawmakers that the best thing they can do for the economy and their constituents is to simply get out of the way.

Today, an appeals court ruled that New York City’s Board of Health overstepped its authority when, at the behest of Mayor Michael Bloomberg, it attempted to limit the size of sodas sold at city establishments.

According to the four-judge panel, which came to a unanimous decision, the Board of Health took action that should have been left to the legislature and also found that the rules were “clearly political or economic considerations, rather than health concerns.”

The proposed ban would prevent restaurants, movie theaters, street carts, and corner stores (any business inspected by the board of health) from serving sugar-sweetened drinks in servings larger than 16 fluid ounces. Mayor Bloomberg’s justification was predicated on the fact that obesity causes increased costs to the public health system. The court accurately assessed that the Board of Health was not acting to protect individuals’ health; rather, they were attempting to socially engineer public consumption at large in the hopes that a lot of individuals reducing their consumption of calories would nudge down the overall rate of obesity. Setting aside whether or not Bloomberg’s soda ban would accomplish that goal, the court noted that this kind of social tinkering is not within the Board of Health’s purview.

The judges wrote that while the board had the power to ban “inherently harmful” foodstuffs from being served to the public, sweetened beverages didn’t fall into that category. Since soda consumption is not necessarily harmful when done in moderation, it “cannot be classified as a health hazard per se,” the court wrote.

Back in March a lower court came to the same conclusion. In the opinion of Supreme Court Justice Milton Tingling, the Board of Health violated the authority of the City Council and that “the loopholes in this rule effectively defeat the stated purpose.”

Bloomberg has vowed to appeal again, despite ridicule from the left and the right as well as criticism that his proposal simply will not affect obesity rates as he hopes (I’ve written more on that here and here). Hopefully, as New Yorkers consider who they want to be the next mayor of their city, they will look for someone who is willing to stand up for their rights rather than attempt to control what they put in their mouths.

Post image for Bad Science: CDC Forced to Reverse its Recommendations on Salt

Mother may know best, but Uncle Sam certainly doesn’t.

In 1977, the federal government put a warning label on saccharine, claiming it caused cancer. It took only 20 years to to admit this was wrong. Then there’s the so-called Healthy Food Pyramid created by the USDA to advise Americans on the composition of a supposedly healthy diet. Although many still follow the recommendations of the food pyramid, it has since been questioned by researchers and nutritionist and even cited as a potential factor in America’s skyrocketing rate of obesity. Now we have another example of bad advice — government recommendations on sodium intake.

For years, public health advocates, politicians, and government agencies such as the FDA, and Centers for Disease Control and Prevention have been cajoling Americans to cut their salt intake and pressuring food makers to comply with salt-reduction programs.  Agencies recommended we cut sodium consumption to less than 2,300 mg a day. In May, the CDC was forced to admit this advice was wrong as well. A report commissioned by the CDC and conducted by the Institute of Medicine of the National Academies found no evidence to support this previous advice.

Over the last decade, studies on salt, many with conflicting conclusions, have called into question the commonly accepted wisdom that less salt is better. Some research has even concluded reducing sodium consumption too much might result in increases in mortality for certain groups of people. According to the report brief, the committee of researchers with the Institute of Medicine was tasked with assessing this new body of research on sodium and to come to conclusions about dietary recommendations for the general population.

The study, titled, “Sodium Intake in Populations: Assessment of Evidence,” found higher levels of sodium consumption were associated with increased risk of heart disease. But there was no evidence to suggest that consuming less than 2,300 mg of sodium was correlated with any increase or decrease in risk for heart disease, stroke or death. Furthermore the study found that reducing sodium intake to less than 1,840 mg a day could increase the risk of negative health outcomes for certain people.

“Recognizing the limitations of the available evidence, the committee found no consistent evidence to support an association between sodium intake and either a beneficial or adverse effect on health outcomes other than cardio-vascular disease outcomes (including stroke and CVD mortality) and all-cause mortality.” But the committee also concluded that “evidence from studies on direct health outcomes is inconsistent and insufficient to conclude that lowering sodium intakes below 2,300 mg per day either increases or decreases risk of CVD outcomes (including stroke and CVD mortality) or all-cause mortality in the general U.S. population.” The committee’s ultimate conclusion is that for most people, sodium consumption is not all that important a factor in managing their health risks. “We found no consistent evidence to support an association between sodium intake and either a beneficial or adverse effect on most direct health outcomes,” said Dr. Brian L. Strom, George S. Pepper Professor of Public Health and Preventive Medicine at the University of Pennsylvania, who chaired the committee that released the report.

So what does this mean? Many people will, undoubtedly, become frustrated with the repeated reversals on dietary recommendations. But this is simply the nature of scientific research. It takes years of good research and rigorous academic debate to come to conclusions about how the human body operates. And even then, those conclusions are –or at least they should be—readily re-evaluated and amended when new evidence is found. This lack of perfect knowledge isn’t a problem when individuals are allowed to examine the current body of evidence and choose whether the recommendations are appropriate for their unique situation. Problems arise when politicians or health advocates assume that one research paper constitutes gospel truth for every person and then attempts to coerce the entire population into complying with those recommendations. One person’s magic potion could be another person’s poison, and  both should be free to make that determination for themselves.

food truckAfter four years, the Council of the District of Columbia finally passed rules to regulate the burgeoning mobile food industry that seem to please all sides. Restaurant owners were hoping the new dining option would be a flash in the pan, but it seems the new rules and the food trucks are here to stay.

After a marathon hearing on proposed food truck regulations in May, it became clear the would-be rules needed “more time in the oven” as Benjamin Freed of DCist, put it. When the Restaurant Association Metropolitan Washington approved the original plan, the Food Truck Association of Metropolitan Washington claimed it would put its members out of business. But the revised rules, unanimously approved by the council, seem to be a compromise everyone can live with.

The proposal creates “mobile roadway vending zones” which lets truck operators win access to 180 designated mobile vending spots in a monthly lottery. The trucks must have at least six feet of unobstructed (parking meters do not count as obstructions) sidewalk by their parking space, reduced from 10 feet in the original proposal (which counted parking meters and other non-obstructions as obstructions). The bill also reduces the fine for parking at an expired meter — a change the food truck association pushed hard for — from $2,000 down to $50 for the first infraction and doubling for subsequent offenses. For those trucks not lucky enough to land spots in the lottery, they must be at least 200 feet away from the designated mobile vending zones — which is a reduction from the 500 feet in the original proposal. If an unassigned food truck parks in the spot of a vendor who won it in the lottery, the offending vendor could face a fine of $2,000.

Despite heated rhetoric from both sides, and even outlandish claims that the food trucks could be used in terrorist plots, it appears this bill, which Mayor Vincent Gray is expected to sign before the June 22 deadline, solidifies food trucks’ place in the D.C. dining scene.

Beer wholesalers are testifying yesterday morning in the Pennsylvania Senate, expressing their opposition to the proposed plans to privatize the state-run liquor store system. As John McGinley, vice president of Wilson-McGinley Inc. in Pittsburgh noted, “The beer industry is private. We don’t need to privatize an already private business.”

He is right, the beer market in Pennsylvania is private, but that doesn’t mean it’s free and certainly doesn’t mean it couldn’t be improved. Currently, Pennsylvanians wanting to buy beer have few choices. In most parts of the state they have two options; either buy a six-pack at high cost from a bar or buy a full case from a distributor shop. And for brewers wishing to get their beer into those bars or shops, unless they are based in Pennsylvania they have to sell to wholesalers first. While the wholesalers oppose the proposed privatization plans, some think that they don’t go nearly far enough. More changes need to be made to Pennsylvania’s alcohol regulatory system—if only to bring it into compliance with constitutional law.

Along with selling off the state-run liquor stores to private interests, the House bill will allow grocery stores to sell wine (and beer if they have a separate eating space and a special license) and will give beer distributors to sell 6-packs as well as full cases and would also give them the option to sell wine, as well. It’s understandable that the wholesalers fear this new form of competition. But the proposal still leaves a glaring problem on the book: Pennsylvania is in violation of the Constitution’s Commerce Clause.

As David Scott highlighted in his paper for CEI, “Don’t forget the Beer,” released last week, brewers in Pennsylvania are allowed to bypass the three-tier system, that is, distribute their own beer instead of going through wholesalers, while out-of-state brewers must sell their beer to wholesalers in order to gain access to the PA market. This, as Scott notes, is similar to Michigan’s wine regulations until the Supreme Court determined that treating in and out of state alcohol producer differently was a violation of the constitution and that state, along with others, was forced to change its laws. Pennsylvania has yet to do so.

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Post image for TTB to Allow, Not Require, Nutritional Labeling on Alcoholic Products

It’s a rare occasion that we get to praise government agencies. While the federal agency governing alcoholic beverages certainly took it’s time to make a ruling on nutrition labeling on alcoholic products — a topic it has been considering since 2003 — it appears the Alcohol and Tobacco Tax, and Trade Bureau (TTB) ultimately made the right decision to allow, not require, companies to add a “serving facts” nutrition panel to their labels. According to a press release dated May 28, 2013, the TTB reviewed the issue of having a “serving facts” statement on beer, wine, and spirits — something that the spirits suppliers have been asking for — and it concluded that it will allow, but not require the use of nutrient analysis in labeling as well as advertisements.

Happily, companies will not have to apply for approval for a new label, so long as the added nutritional facts panel follows the example provided by TTB and they may include information regarding the serving size, number of servings in a container, calories, carbs, protein, and fat per serving.

This is good news because there had been some talk in the past about requiring all suppliers of alcohol to add this nutritional information to all of their products, a change that could have been disastrous for some smaller producers of alcohol and consumers who like variety. As I wrote back in 2011:

“Craft brewers on the other hand, produce a wider variety of beers, and far fewer barrels of each one, so they will struggle with the cost of testing and labeling the nutritional contents of their many beers. In its 2008 comments on the TTB labeling requirement proposal, the Brewers Association, which represents more than 1,400 U.S. small brewers, estimated that the annual cost of compliance with the proposed labeling requirement could be as high as $18,000 for brewers producing less than 1,000 barrels a year and more than $350,000 for brewers making more than 100,000 barrels a year.”

Requiring all suppliers of alcohol to label their entire line of products would almost certainly mean that smaller wine makers and brewers would have to reduce the range of products they sell and/or raise their prices. While this guidance issued by the TTB is a stop-gap until it issues regulations regarding nutritional labeling, let’s up that the voluntary aspect remains part of the plan.