Just cut it out
Recently, I was reading in the news that was some voluntary initiatives to limit the amount of sugar in processed food. This is when I put on my economist hat and laugh at the idea.
At a first glance, it may not seem like a bad idea for the food companies to reduce the amount of sugar in their food. They get to save cost. (Not much as sugar is not one of the more costly ingredients in most food stuff. I bake so I know the price of sugar. I do not even bother to collect any free packets of sugar even if I happily take the artificial creamer and other sweeteners.) they will be able to advertise that they have less sugar than their previous formula. For food companies that are trying to fool us into paying the same amount for lesser, this should be a good idea. Their consumers will also live longer which means less money invested in looking for new markets (Notice the rarity of Russian roulette).
This is true in the case of a monopoly where the vendor can be quite rational. The issue is that food companies have lots of substitutes and competition. It is possible to have less sugar but the consumers may substitute the product with less sugar with something else. Would any company want to carry their original formula and their reduced sugar formula? It is a possible strategy but it will be costly.
Claim to be "healthier"? This rather obvious suggestion has a few flaws. Firstly, the "healthier" label has been watered down by the food companies. There are cookies and candies that have the "healthier" label. Secondly, most processed food companies products are simply not part of a healthy diet. This incorrect claim will attract along of criticism from the medical line. (And most pseudo-medical people.) If there is any serious controversy, the media will not be far behind.
And that is why the government needs to step in from time to time before the free markets become detrimental to society. The main problem is that most governments are beholden to food companies. Even if they are not on the payroll of these companies, they often find that their allied countries have already sold out.
So the bottom line is not why food companies are not making healthier products but just how profitable is it to keep the consumer healthy?
At a first glance, it may not seem like a bad idea for the food companies to reduce the amount of sugar in their food. They get to save cost. (Not much as sugar is not one of the more costly ingredients in most food stuff. I bake so I know the price of sugar. I do not even bother to collect any free packets of sugar even if I happily take the artificial creamer and other sweeteners.) they will be able to advertise that they have less sugar than their previous formula. For food companies that are trying to fool us into paying the same amount for lesser, this should be a good idea. Their consumers will also live longer which means less money invested in looking for new markets (Notice the rarity of Russian roulette).
This is true in the case of a monopoly where the vendor can be quite rational. The issue is that food companies have lots of substitutes and competition. It is possible to have less sugar but the consumers may substitute the product with less sugar with something else. Would any company want to carry their original formula and their reduced sugar formula? It is a possible strategy but it will be costly.
Claim to be "healthier"? This rather obvious suggestion has a few flaws. Firstly, the "healthier" label has been watered down by the food companies. There are cookies and candies that have the "healthier" label. Secondly, most processed food companies products are simply not part of a healthy diet. This incorrect claim will attract along of criticism from the medical line. (And most pseudo-medical people.) If there is any serious controversy, the media will not be far behind.
And that is why the government needs to step in from time to time before the free markets become detrimental to society. The main problem is that most governments are beholden to food companies. Even if they are not on the payroll of these companies, they often find that their allied countries have already sold out.
So the bottom line is not why food companies are not making healthier products but just how profitable is it to keep the consumer healthy?
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