Mars Candy, Tainted Policy (2015 Jun)

by Barry A. Liebling

See if you can spot what is acceptable and what is disgraceful in this picture.

Mars Incorporated, one of the largest food manufacturers in the world and the maker of M&M’s has recently endorsed a proposal by the federal government to require packaged foods to have labels that disclose the amount of added sugar in the product. Furthermore, Mars has publicly declared that it supports government actions that will limit the number of calories from added sugar to 10% of daily energy intake. In the news release Mars management emphatically states that its policies are animated by their concern for improving public health.

As of now Mars does not include information on added sugar on its products’ labels and, according to The Wall Street Journal, does not plan to do so until it is required by the Food and Drug Administration.

Let’s start with the acceptable part. It is appropriate for Mars management to continually look for ways of improving its products and to communicate effectively with its customers. If top executives at Mars believe it is valuable to provide customers with information on how much added sugar Mars products have they should go ahead and do so. There is nothing that prevents them from including a line item regarding sugar on each of the company’s products.

Perhaps the Mars management team believes that disclosing information about added sugar is valuable, but many consumers do not realize why and how this is important. In that case Mars has the option of creating an educational campaign with advertising and public relations dollars to explains the benefits of having added-sugar labels on food products. Being one of the most successful, cash-rich players in the industry, Mars has the opportunity to tell its story persuasively.

Observe that presently Mars does not have the power to tell its competitors what to do. Rival food companies might decide to follow Mars and explicitly inform their customers about their products’ sugar. Alternatively, Mars competitors might calculate that their customer-base is not impressed with this type of information and will refrain from disclosing it on their packages. Notice that in a free-market scenario each private food company has the authority to decide how to market its comestibles – providing there is no force or fraud involved.

It is important to note that if Mars is correct and proceeds on its own, and its rivals fail to change their labels in a similar fashion, Mars will have a competitive advantage. Some consumers will have a more positive opinion of Mars products and will be more likely to be customers.

To summarize the acceptable part of the story – it is entirely proper for Mars, on its own, to adjust its policies with respect to how much added sugar is in its products and what truthful messages it sends to its potential customers.

Now let’s consider the disgraceful part. All business actions should respect everyone’s individual rights. This means that the use of coercion as a business tactic is strictly out of bounds.

The Mars proposal is a classic case (unfortunately not unusual) of large companies rejecting the principles of free markets and going to the dark side – deciding to employ the strong arm of the state to achieve its goals.

It is not obvious what is going through the minds of Mars executives when they explicitly endorse the use of government force as part of their business plan. There are, however, several plausible possibilities (none of them clean).

It has been suggested that including information on added sugar is an expensive undertaking. Measuring and labeling the amount for each food product is a difficult task. Do Mars executives think that having a new government requirement will be more burdensome to its competitors than to Mars? Is the alliance Mars is making with the federal government a tactic for increasing the production costs of all food companies with the understanding that Mars – a giant among manufacturers – is in a better position than its rivals to absorb the extra costs? Does Mars management consider using government bullies just one of many tools it has in its repertoire?

Perhaps the executives at Mars believe that consumers should be informed about added sugar and also think their customers are not interested. Management might worry that if Mars puts added sugar labels on its packages and its rivals do not, consumers may decide to buy more candy from other companies. Does Mars management believe that an FDA mandate that requires all companies to do the same thing will shield them from potential consumer backlash?

Is Mars endorsing added government intervention in food labeling because it is seeking favors, or special treatment, or additional contracts? Note that Mars has a long history of being involved with the government. During World War II M&M’s were sold exclusively to the military.

Are Mars executives sincere when they embrace government intervention? Do they earnestly believe that the proper way to deal with people in business is to have your preferences backed up by force? Do they regard the principle of dealing by mutual consent as naive, old-fashioned, and unrealistic?

To summarize the disgraceful part of the story – Mars is a powerful, successful company with an abundant number of intelligent executives. They should know better, reverse their heavy-handed approach, and demonstrate that they understand and appreciate the virtue of freedom.

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