Labels Won’t Solve Obesity and Alcoholism

The National Consumers’ NCL says the absence of nutritional labeling on alcoholic beverages contributes to everything from alcohol abuse to obesity, and they want the Alcohol Tax and Trade Bureau (TTB) to do something about it. But the regulations they are pushing are unlikely to solve the ills they describe.

TTB had proposed nutritional-labeling mandates in 2007 when the NCL and the Center for Science in the Public Interest petitioned the agency. After receiving a large number of public comments, TTB chose not to finalize the rule. Now the NCL is renewing pressure for agency action by capitalizing on problems unrelated to alcohol labeling.

For example, the NCL suggests that the abuse of caffeinated alcoholic beverages on college campuses is somehow related to labeling of those products. In a recent press release, the group exclaims: “The nine college students who went to an emergency room for alcohol poisoning after drinking too much of a caffeinated alcoholic beverage earlier this year may not have realized just how much alcohol they were consuming …. Maybe if the standard drinks per container had been required to appear on the labels, they wouldn’t have made that mistake.”

Does the NCL really think that college kids will moderate alcohol intake because of a government label? It’s more likely that college students would use such labels to select drinks with the highest levels of caffeine and alcohol. After all, that’s why some of them abuse these products: to get a caffeine or alcohol buzz. Back before these drinks were available, college kids used to drink cough medicine (apparently some still do) to get the same effects. The problem here is not the lack of good labeling.

Similarly, it’s highly unlikely that alcohol-labeling mandates will cure our obesity problems, as the NCL also suggests. Consumers already have sufficient access to caloric information online. And it’s also conveniently available on smart-phone applications that include calorie information on everything from alcohol to bread and butter. Putting this data on a bottle of wine won’t suddenly make people do what they can easily do now: count alcohol-related and other calories.

While benefits are unclear, such mandates pose drawbacks for consumers – both monetary and aesthetic. First, producers will incur costs for creating systems to precisely measure and document calorie content. While generic estimates online are sufficient for consumers to count calories, labeling mandates will require greater precision for each specific product to prevent charges of fraudulent labeling. Producers will pass such costs onto consumers, particularly given existing tight profit margins for various segments within the alcohol industry.

Some producers may decide to reduce other information on labels – information consumers find more valuable – to make space for mandated data. In fact, if wine, beer and spirits buyers placed a higher value on nutritional data, producers would provide it. Instead they use that space to provide something consumers want: product information (tasting notes, food-pairing information) and attractive designs.

Consumers confirm the value they place on this information in survey research, as does the success of Yellow Tail wine’s Kangaroo label. Common sense does as well. After all, who doesn’t enjoy presenting an attractively packaged wine at a party?

If TTB issues any new labeling standards, it should expand what information producers are allowed to include. A decade ago, the Competitive Enterprise Institute filed comments opposing federal regulations banning health-benefit information on alcohol labels. That ban still stands, even though considerable data indicates health benefits are associated with moderate alcohol consumption. Instead, the federal government forces producers to list only “government warnings” and negative claims about their products.

Regulators should allow producers to provide any information that they want on their labels outside of fraudulent claims. Consumers can vote with their pocketbooks.