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Cruet Cronyism: How Big Olive Oil and Big Government collude in restraint of dining

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Politics,Beltway Confidential,Timothy P. Carney,Fiscal Policy,Big Government,Cronyism

You may have heard that the European Union is effectively banning olive-oil cruets and dipping bowls at restaurants.

This is a delightful emblem of the absurd technocratic regulatory meddling mindset that pervades the EU.

But look closer and it shows you something else about the nature of regulatory Leviathans. One EU official noted to the Telegraph, “It will seem bonkers that olive oil jugs must go while vinegar bottles or refillable wine jugs can stay.”

Hmm. Why would they regulate one product and not another? Maybe this isn’t motivated purely by health considerations. Maybe the powerful olive oil industry played a role.

Wherever you see strict new regulations, look for well-connected industry that hopes to profit off of them. From the Telegraph, check out these telling passages:

the choice of a restaurateur to buy olive oil from a small artisan producer or family business will be outlawed….

“This will affect us. It is about choice and freedom of choice. We buy our oil, which we have selected from a farm in Spain, to serve our customers,” he said

“Yet more packaging is not going to be eco-friendly and will limit choice to more mass produced products.”

And the New York Times notes this:

The new rule also offers suppliers an opportunity to promote brand awareness….

Fifteen of the Union’s 27 governments supported the olive oil rule. They included the Continent’s main producers of the product — Italy, Greece, Spain and Portugal — which have been among the hardest hit by the crisis in the euro currency zone….

One criticism of European Union intervention in the olive oil business is that it favors big brand suppliers rather than small farmers, who continue to suffer low prices despite a fall in production in the past year.

An EU spokesman, quoted by Reuters, even defends the law on the grounds that hey, even the olive oil producers like it!

“The fact that the EU is the world’s major producer of olive oil – for up to 70 percent of the olive oil globally – perhaps this is even more than just a good consumer story for European citizens,” commission spokesman Oliver Drewes told reporters.

So, at least part of the point of the rules is to protect major industrial producers from the market — thus hurting consumer choice and smaller competitors.

This isn’t unique to Europe or to olive oil. Mass producers typically favor regulations that kill artisanal producers. In the U.S., we’ve seen this in toys, food, cigarettes, and more.

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