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Our Weekly Economic News Roundup: From Expensive Cities to Cheaper Healthcare
May 4, 2019
The Most Unexpected Market
May 6, 2019
Cauliflower rice has been called the new kale. To create the rice you can buy it frozen or shred the florets and then sauté them in olive oil. In an NPR interview, one person even said you cannot tell it’s not rice.
And that might be the problem, since it isn’t.
Cauliflower Rice Law
Almost half of all U.S. rice comes from Arkansas. When a rice farmer who was also a state legislator bought some and tasted it, he decided the label had to be banned. So, during March, Arkansas legislators prohibited the cauliflower rice name from all food labels in the state. Saying that the word rice has to refer to actual rice, the law included a $1000 fine for a “mislabeled” product.
Impossible Meat Law
Missouri has a similar law that refers to products labeled meat that do not come from a cow, a chicken, or some other creature that has two or four legs. Contested by the Missouri ACLU, the State and its opponents said they were working out a settlement. The Court gave them a May 1 deadline (but I could not find the decision).
The Almond Milk Law
And, yes, dairy farmers also went to court. Here, the 9th Circuit said that a “reasonable consumer” knew the difference between almond milk and cow’s milk. Blue Diamond Growers would not be required to say “imitation milk” on their labels.
Our Bottom Line: Food Labels and Competition
The Arkansas legislator who led the passage of the rice labeling law suggested that, “This law only affects people who want to deceive the public about how their food originated…”
I suspect another motive.
Whether we are talking about cauliflower rice, Impossible Foods burgers, or almond milk, the issue is competition. The rice, meat, and milk producers want to prevent similarly named products from entering their market. On a market structure continuum, farmers compete in markets that resemble perfect competition where their products traditionally are almost identical:
Those farmers certainly would not want differentiated trendy foods to benefit from their names.
My sources and more: I first heard about the Arkansas law during an NPR newscast. and then read more at arkansasonline. Meanwhile, the Missouri case is here and the results of the almond milk case, here.
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