03 February 2005

Over-regulation favours big business

On 31 January the European Union Commission unveiled exactly what EU law about food traceability means. EU guidelines spelled out the meaning of that new requirement,technically known as Article 18 of the General Food Law. Every business in the food and drink trade must now keep detailed records of every delivery from a supplier and every delivery out to a customer.

All records must be kept for five years, unless the products are perishable, in which case records must be kept for six months. The intention is to have standardised "traceability systems" across the EU, so authorities can track food almost instantly in the event of a crisis,such as an outbreak of food poisoning or contamination. Transport companies that merely ship food from place to place are also obliged to keep batch by batch records of every delivery they make to a restaurant, grocers or canteen.

There is something pathological about all this. Government and big business create an economic environment that, through (for example) agricultural, transport and energy subsidies, favours the large and global at the expense of the small and local. When this leads to large-scale outbreaks of food poisoning the government reacts by imposing regulations that make it even more difficult for small businesses to operate, because it is the small businesses that suffer most from the costs of complying with the regulations. It's a self-perpetuating process; most of us don't want it to happen, and if policymaking were about specifying and rewarding the achievement of agreed, explicit outcomes it wouldn't happen.

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