11 July 2019

Don’t be fooled – big business loves the nanny state

By

There is a big difference between being pro-freedom and being pro-business, and the public health debate illustrates this point very well.

Whilst advocates of authoritarian ‘nanny-state’ programmes often like to paint a picture of a battle between a virtuous state and avaricious businesses – and accuse their opponents of cosying up to ‘Big Sugar’ and the like– the reality is much less clear-cut.

In fact, big business is often very happy to collaborate with the government in pursuit of paternalistic objectives. Sometimes they even go so far as to urge ministers to more stringent action than they have already taken, as in 2016 when retailers called for mandatory reductions in sugar levels in foods.

Mike Coupe, the CEO of Sainsbury’s, is quoted as saying that whilst his company had taken some unilateral measures the law needed to go a lot further:

“We need a holistic approach to tackle childhood obesity, including compulsory measured targets across all nutrients – not just sugar – and mandatory traffic light labelling across all food and drink products, regardless of whether they are consumed inside or outside the home.”

Of course, a big company calling for more regulation is nothing new. But in this instance, it doesn’t feel like an effort to raise barriers to entry – at least, not directly. Rather, it looks like the result of a conflict between two competing demands: the expectation, in the age of ‘corporate social responsibility’, that corporations concern themselves with moral issues and the reality, in a competitive market, that Coupe’s customers will not stand for him telling them what to buy.

Functioning markets reward servants, not masters. If Sainsbury’s were to unilaterally slash the sugar content in its sweet products, people who enjoyed those products could simply take their business elsewhere. The only safe way for Coupe and co to adopt a paternalistic stance is for the Government to force all their competitors to do the same.

Nor is this the only way that the public health debate exposes businesses’ limited commitment to consumer choice.Take the response to the sugar tax. Responding to my previous article on the subject, Margot James declared that the great virtue of the sugar tax was not that it priced sugary options out of reach of less well-off voters, but that it effectively took them off the shelves altogether by prompting reformulations to avoid the levy.

From a liberal perspective, of course, having no way of accessing a product is even worse than having an artificially-expensive way of accessing it. But since illiberal politicians are unlikely to be moved by liberal reasoning, the more significant aspect of this statement is what it tells us about the role ‘Big Soda’ is really playing in the public choice/public health dynamic.

With a bare handful of exceptions, the overwhelming majority of soft drinks have seen their sugar content slashed whilst maintaining their price points. When customers took to social media to complain, or to resell pre-tax products at luxury prices, the companies’ PR divisions engaged in Pravda-ish efforts to pretend that everybody loves their new and ‘improved’ recipes.

Even where manufacturers have chosen to buck the trend, we can see the impulse towards Coupe-style collaboration at work. Coca-Cola have made a virtue of maintaining their original recipe… but only for their flagship product. The rest of the time, they’re “helping us enjoy less sugar”, which is good of them. When San Pellegrino dipped their toe in the water with their “Original Italian Taste” –i.e. full-sugar – sodas, they not only made them limited edition but went to great lengths both to justify doing it at all, stressing that the recipe is still less sugary than their old one and the portion sizes are restricted to boot.

Does any of this mean we should solely blame big business for the effects of the sugar tax? Of course not. Regulation is intended to change behaviour, so politicians must share responsibility for the changes wrought by the same (just as they don’t hesitate to take the credit).

All of this highlights the true scale of the challenge Boris Johnson would be taking on if he chose to make a real go of rolling back the ‘nanny state’. It isn’t just a matter of taking on politicians and lobbyists: corporations look very likely to line up against any such push, even if they intend to quietly re-introduce high-sugar products in the event of victory.

This is not to say such paternalistic alliances between corporations, campaigners, and politicians can’t be beaten. They lost in 2016, and if Johnson delivers Brexit he will have proven that such fights can be won. But he will also have seen first-hand just how hard they are. Will he really be up for another?

CapX depends on the generosity of its readers. If you value what we do, please consider making a donation.

Donate

Recurring Payment

Thanks for your support

Something went wrong

An error occured, but no error message was recieved.

Please try again, or if problems persist, contact us with the above error message. We apologise for the inconvenience.

Henry Hill is Assistant Editor of ConservativeHome