Food Regulation That Actually Helps People

While the food puritans howl about the presence of the reviled ingredient of the week in what we eat and try to impose punitive measures on consumers (taxes and food bans), actual food regulation in the service of protecting consumers goes on about its dull and unglamorous business. We just had an outbreak of it in Southern California.

It is both comically and cosmically just that the criminal in this case is Whole Foods. Whole Foods stores in three southern California counties, including San Diego county where I live, have been found guilty of a whole host of small “screw the customer” behaviors that mostly used incorrect weights and measures (apparently done deliberately) to increase the cost of foods by a just a smidgen here and there. For details, here is the LA Times write up on the issue and here is the SD Union-Tribune’s article. The company has been fined $800,000 in a civil consumer protection case brought by the city attorneys of Santa Monica, Los Angeles and San Diego, and may be subject to additional penalties by the individual municipalities where the offending stores are located.

The penalty to individual customers is small, but noticeable, and would add up over time. Their Olive Bar purchase, at $7.99/pound, for example might be 6 oz. of olives plus a .5 to .75 oz. container. When weighed for purchase, instead of off-setting the total 6.5 oz. by the .5, it would just be rung up as 6.5 ounces. What’s the penalty?  6 ounces = 0.375 .lb = $2.99; 6.5 ounces = 0.4063 .lb = $3.24. The customer is overcharged $0.25, or about 8%.

Two other weights and measures related issues have to do with the store selling in-store packaged goods that say they are x many .oz/grams, but contain less (this may be a weigh-the-container-too issue as with the self-serve) and with selling items by the piece instead of by the pound. I didn’t understand at first why the latter one was a problem because aren’t most things sold “by the piece” in stores? One can of this, one box of that, 3 ears of corn for a dollar, etc. When I thought about it, I realized that when you have items of irregular size and are composed of multiple ingredients (the example given in the news was kebabs), some of which are much less than expensive than the others, the temptation is to use the cheaper ingredients as a great part of the “piece”, and to have pieces of significantly different weights. A kebab with 6 ounces of beef and 6 ounces of vegetables is heavier than one with 4 ounces of beef and 6 ounces of vegetables, and the weight differential comes from a more expensive ingredient. If both cost $4.99/each, then the second kebab is smaller and has less valuable ingredients than the first. If sold by weight (12 ounces vs. 8 ounces) then the first might cost $4.99 but the second will cost $3.33, a difference of $1.66 or 33%.

On top of this, they seem to have played fast and loose with updating barcode prices in their computer system, and would charge higher prices at the checkout counter than what was listed on the shelf tag. They also failed to charge advertised prices, which is a huge deal which actually goes back to civil rights as well as general consumer protection, because you cannot do a bait-and-switch nor can you charge two different prices for the same product based on who the customer is.

Whole Foods protests that it’s prices are accurate 98% of the time, as though this is an acceptable level. In the U-T article, the reporter notes (my emphasis):

Already, Whole Foods Markets throughout the state had received multiple citations and fines by weights and measures agencies trying to get the stores to comply before alerting prosecutors. Investigators then inspected 69 stores in 19 counties where multiple violations were ongoing.

“Our citizens need to have confidence when they shop that the price advertised is the one that is charged,” said San Diego city Attorney Jan Goldsmith in a statement about the agreement.

The repeat offenses stand in stark contrast to how rarely overcharging happens in San Diego County. A recent U-T Watchdog review of data showed overcharges of one-tenth of 1 percent of bills checked at retailers throughout the county in September, or $94 out of $64,278 in transactions reviewed.

So, basically, these guys had already been caught and told to cut it the fuck out by local agencies, and when they continued to flout the regulations and screw their customers, got turned over to the lawyers. Further, their rate of fraud is too high to be an accident. They are statistically severely out of line (a self-described 0.02% vs. a market average of 0.001% in San Diego) and the mode of the infractions indicate a pattern of duplicity.

Why anyone is surprised that a Texas corporation operated by a rabid anti-regulation nutcase would behave in a predatory manner towards its customers, who have already said they are not influenced by price and who have demonstrated that they care more about feeling good than doing good, I can’t say. Even though I want to snicker (oh, OK, I did snicker) at the thought that the people who patronize Whole Foods would not realize that they were being overcharged, the bigger issue is that there are kinds of food regulation that are perfectly and legitimately within the purview of the state and that these actions need to be enforced aggressively because they directly, immediately and unequivocally harm the public.

Any store can accidentally overcharge. I have seen this happen at least once at every grocery store I regularly use. A checker charges for key limes instead of regular limes or rings up 7 yogurts instead of six. A complicated store special might not have been entered into the price data base correctly, so I only get an .80 cent discount instead of .85 cents. It usually happens about as often as a mistake is made in my favor (which is to say once or twice a year across all stores) and I figure it balances out in the end.

But when an entity in the food chain deliberately sets out to defraud people or is negligent about food safety, such as the problems with Foster Farms chicken and salmonella earlier this year, then the only entity with the resources and clout to enforce the law is the regulatory state. Before we worry about whether sugar is “toxic,” we need to ensure that actual toxins and other contaminants are prevented from entering the food supply, and that means spending less time pearl clutching and more just plain spending on food inspectors and programs.


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Posted in Economics, Politics
One comment on “Food Regulation That Actually Helps People
  1. Klassy says:

    This is a good post. One of the reasons (among many) that I deplore the food police is that they debase the very idea of regulations!
    Regulations should actually free us– we can go about our life sure that we are paying the right price, or that our air is clean, or that our car is not going to kill us. Saving us from drinking too much soda in one sitting does not fit this bill.


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