Food Products Case Study

1300 Words 6 Pages
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…
However, the food manufacturers fail to provide a clear distinction of what exactly the term “natural” really means. Consumers have a difficulty in determining the true definition and what really is inside the food they are consuming on a day to day basis. The measurable size of this problem is affecting the whole nation itself. Henceforth, the FDA not able to provide enough information for consumers is having a national implication of many vast majorities of groups in the United States. In December 2015, the Consumer Reports National Research Center conducted a survey of a nationally representative sample of 1,005 adults to get their take on natural food labeling. The results were significant as 85% believed no chemicals were used during processing, 84% No artificial ingredients or colors, 84% No toxic pesticides, and 82% No GMOs. However, what these consumers might perceive about the food products compare to the reality is completely wrong. This has resulted in health problems for consumers of all ages and gender. Specific cases from information failure include pathogens such as Salmonella, E. coli, and Listeria that have been found in food products that caused an estimated 14 million cases of foodborne illnesses each year. To sum up resulting in about 60,000 hospitalizations and 1,800 deaths all over the United States. The statistics reveal that food labels are not specific to revealing …show more content…
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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