Information Failure On Food Labels

The problem analysis of information failure on “natural” label food products examines whether government intervention is needed or if the market is able to resolve the problem on its own. The market failure for this regulatory rule has been a significant information failure of labeling food products “natural” by the food manufacturers. The food industry market fails to provide all the information required by consumers to make healthy rational consumption decisions. Mislabeling the term “natural” on food products is affecting consumers of all types. Even the most educated consumers on nutrition knowledge have a hard time understanding the true definition of the term “natural” on food products. The inadequate actions of the FDA in not defining …show more content…
Not only does misinformation affect their decision on food products but it also impacts their health and nutrition as well. With an in-depth look at the qualitative and quantitative analysis along with market feasibility will create a pivotal decision for the government to decide to either intervene or leave it to the market itself.

Qualitative Analysis of Misinformation on Food Labels

The majority consumers of food products are negatively affected by the misinformation of “natural” on food labels that has inhibited many consumers to make healthy rational consumption decision. The population group that is most vulnerable to this problem is very young children and individuals that are 60 years and older. These two groups don’t have enough knowledge and the background education to make pivotal decisions on making the right food choices
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There needs to be a government intervention to solve the information failure by food manufacturers to consumers. If left alone for consumers and food companies to solve on its own, there would be no solution since there are significantly increasing health problems due to misinterpreted nutrition label for “natural” foods. The government intervention will allow a change to be made from the current issue. The two parties between consumers and food companies need a solution for consumers to be confident in their choice of purchasing food products. As previously stated, the majority of consumers have limited knowledge of what “natural” really means. Currently, the lack of government standards on food labeling issue has allowed food companies to label “natural” in a misleading way. The food manufacturers are using the lenient rule proposed by the FDA for food labeling on “natural” products to benefit themselves and not evaluating the consequences of the consumers. This has resulted in negative externality that is harming consumer health and well-being while the food companies are benefiting without cost. After all, the labels on food products concerning to the FDA jurisdiction do not have to be reviewed before marketing which is a major source of the problem. Therefore, the food companies are able to conceal the negative information that will

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