California is notorious for implementing business regulations that make no sense. These regulations are costly for market participants and raise the cost to do business there. This once great state is seeing something I thought unimaginable in my lifetime, more native-born people leaving than entering the state.
I guess unaware of this trend, my father’s country of birth, seems to believe that living by the California principle of imposing burdensome laws and regulations on businesses is a good thing.
Ireland is mandating specific requirements for health labeling on any alcohol sold into the country. A new label with all red capital letters in Times New Roman font. The labeling will require alcohol producers to put on the label warnings that alcohol causes liver disease, a link between alcohol and fatal cancers and an image of a pregnant woman with a line drawn through.
Naturally alcohol producers around the world and in Europe are outraged. Many countries including Australia, England, France, Italy, Spain, and the United States have lodged complaints, with the Non-EU countries lodging complaints with the WHO and the EU countries lodging complaints with the EU.
Ireland’s new health regulations present two problems. 1. There is only so much real estate on a bottle of wine, and 2. Only so many wines will sell into Ireland.
The real estate on a bottle off wine is precious, unlike a bottle of ketchup, the bottle of wine tells a story, and the more noticeable the bottle, the better chance of selling. This is especially true for small or up and coming wineries.
Unlike the nutritional requirements where a QR code can be a compromise, the Irish government regulations seem so stringent that the warnings be glaringly obvious that only taking up valuable real estate on the bottle will suffice.
With the new labeling requirements being so business unfriendly, many businesses will be shut out or will not enter the Irish market. For small wineries, to develop a new bottle label for a unique market, maybe so cost prohibitive that they don’t enter the market. The loser at the end of the day becomes the Irish consumer, who will enjoy less variety of products and have a smaller market.
California puts on often times absurd requirements on businesses as a condition to operate in the state. Businesses will often comply with ridiculous requirement because California is the eight biggest economy in the world, whereas Ireland’s GDP ranks its forty-first.
Whereas companies can’t skip over California because of market size, the same can’t be said of Ireland.
Before Ireland starts flexing its regulatory muscle and makes itself the California of Europe, it may want to pause and think of the flaws its drawing into its market economy!