Thursday, 26 May 2011

On The DEHP Scare

The leading editorial in the Taipei Times today is a response to the recent revelation that a drinks manufacturer in China had been adding the plasticizer DEHP to its' products (some of which, e.g. Sunkist juice, I have myself drank). The plasticizer is apparently a cheaper alternative to act as a "clouding agent" than palm oil (it is not soluble in water). Turton pulled a table from somewhere listing the names of the drinks and their respective DEHP content in parts per million - the range is between 2ppm and 34ppm, which seems very high in comparison with the U.S. EPA's limit for DEHP in drinking water as a tiny 6ppb (parts per billion). I don't know anything about the toxicity to the human body of DEHP at these concentrations, so it could be that there is a real danger or it could be that the danger is exaggerated if the regulator's limits are set hysterically low. Some brief googling turns up an abstract for a study indicating that DEHP ingested by pregnant rats produces some damage to the liver, kidneys and testes of their litter. However, the conclusion to another paper states that...
"The general view of DEHP toxicity is therefore that mechanisms for adverse effects do exist in rodents, but that these do not appear to be of great significance in non-human primates and that the evidence that such mechanisms could be operative in humans is lacking."
So from these two papers, it seems that both the banning and strict limitation of DEHP in drinks is due to a "better safe than sorry" policy, rather than certain knowledge of its' toxicity to humans. Can anybody improve on that conclusion?
"Indeed, the latest incident exposed not just the shocking news of potentially harmful chemical additives in beverages and dairy products, but also suggested the existence of loopholes in the nation’s food safety system."
OK so potentially harmful chemical additives. Well I think we're potentially looking at an hysterical over-reaction here, fuelled in part, no doubt, by the mere fact that the drinks manufacturer is located in China - as in Turton's snark:
"Wouldn't the list of poisons not found in food products coming out of China be shorter?"
Yet supposing, for the sake of argument, that DEHP at these concentrations does indeed pose a serious health risk to the human body, the salient question is surely how to best prevent its use by potentially unscrupulous manufacturers. In regard to this question, does the existence of legal loopholes in the Taiwan government's food safety regulatory regime actually surprise anyone? It seems to me that there are one or two similar food scares just about every year. Moreover, the enforcement of these regulations has to be done through inspections, which can never be carried out on more than a small proportion of imported goods simply due to the scale and consequent cost to a government with a limited budget. Consequently, should it really be so surprising that now and again a few dodgy items slip by the regulatory regime unnoticed? I think not.

Under a marketized system of regulation (i.e. companies expressly set up in order to verify the safety of food items), such as has existed in the electronics industry more or less since the beginning with UL and others, these problems would largely disappear since the value to importing manufacturers of their products being able a trusted food safety brand would surely outweigh the cost to them of submitting product samples for testing. The regulatory company would thus be in a position to reliably verify the safety of the vast majority of imported food products, since they have a profit incentive to expend the resources doing this - an incentive which would no doubt be significantly augmented by the policies of retailers to only stock food products licensed by those regulatory companies with the best market reputations. A government agency faces no such incentive but rather a mountain of costs for which they need to plead to central government for an increased budget.

Of course, under both systems it is true that manufacturers exporting food products to Taiwan would have an incentive to comply with the respective food safety regulations. Likewise, it is also true that under both systems there may occassionally be unscrupulous manufacturers who will try to evade the regulation. However, this must be judged against the fact that the current system seems to experience this sort of problem annually, and the larger resources that a marketized system of regulation could likely bring to bear on the problem. On purely utilitarian grounds, I think such a market system of regulation trumps the government agency model.

Yet I think it should also be noted that since human error can never be mitigated or eradicated completely, and since the management of risk typically involves some trade off between values, it is fair to say that no system of food safety regulation will ever be perfect. Perhaps, however, a market system would spare us the continuing scare stories and the growing tendency toward public panic and distrust of both the market and all things Chinese.


  1. Neat argument, but what you are dealing with is fraud and defamation of brand for the companies involved. Drink manufacturers and consumers were buying a product that they thought was made with a certain product and we now mysteriously find out it wasn't.* If I offer to sell you milk and all you get is chalky water, then I have committed a fraud and as long as you don't know and pass it off to your customers, when my cunning plot is discovered, your brand suffers. For an efficient marketplace to work there needs to be some ability to trust what is offered is really what I'm buying and not something else. Hence why brands work so well and why Asians tend not to understand them well. I don't drink Hey Song products because they taste like they came out of a meth lab. When dealing with food, most people prefer to use more caution.

    *I wonder how this was discovered as I'd also like to find out what the actual deal was with arsenic only being found in western franchise chains. Things are so opaque that you often don't know the story till decades later.

  2. Agreed - your emphasis on brands strengthens the argument. You and your repeated references to meth labs... ;-)

  3. Have you seen "Breaking Bad"? If not download it this weekend and watch it, you'll thank me.

    I get the feeling that Europe and the UK were/are pretty much unscarred by the scourges of crack and meth. I'm all for drug legalization till you get to these two, then I start having my doubts. It's really hard to explain how addictive they are unless you've tried them or have had friends who have. In Phoenix they were busting 1-4 labs a month. In Mexico, the Chinese guy who supplied the various cartels with ephedrine was caught with half a billion in US dollars with another couple hundred million Euros. Rural midwest got hit hard as well by meth. Makes your skin crawl to see someone all skin and bones with bad teeth and twitching body asking for money.

    Enough about that, Most people skip brands because they are either so omnipresent you don't think about them or you're not a westerner and they mean something else entirely.

    I have to take deep breaths and count to ten when ever some leftie starts going on how evil brands are. Don't even get me started on the stupidity of the "No Brand" campaign.

  4. "I get the feeling that Europe and the UK were/are pretty much unscarred by the scourges of crack and meth."

    I think you might be right about that.

    On "Breaking Bad" - not yet, I'll have a look later.

    "Most people skip brands because they are either so omnipresent you don't think about them or you're not a westerner and they mean something else entirely."

    Not sure what you mean there in that second clause.

    On drug legalization - I'm 100% for it largely because of Liberal principle and the negative political externalities created by the "war on drugs". The other thing which must not be ignored is the liklihood that, were the State legislatures to nullify the Fed's prohibitions in isolation from systemically radical reform, the social problems created by the use of crack and meth are not going to go away (and nor are the de facto private armies set up to ensure market supply). And actually, even with those magically acquired reforms, those nightmares still aren't going to go away by themselves. It will have to come down to lots of specific individuals doing lots and lots of very specific and very dirty work. But such are the wages of having abused the State as the solution to every conceivable social problem for more than a century.

    "I have to take deep breaths and count to ten when ever some leftie starts going on how evil brands are."

    Yeah... Underwriter Laboratories is my axe of choice to use against that rabble.

  5. Read this, I think you are one of the few people who can appreciate it with a chuckle.

    For Asians, it seems brands are more of a prestige item versus a marker of quality. While you do get that in the West, I've never seen it taken to the extremes that it is here.

    Breaking Bad is fantastic. Michael Cranston is phenomenal. Only 2 more months and the new season starts....

  6. "I think you are one of the few people who can appreciate it with a chuckle."

    Leftist in Venezuela using Hayekian analysis (despite himself) to criticize Chavez. Sure! Hey, at least he's honest.

    Well, I left a comment for Mr Toro. He's right that sometimes commenters following an Austrian line fail to observe some important distinctions in the nature of State interventions and instead tend to lump them all together far too coarsely - at least for a Leftist pallate. That said however, State interventions can all be accurately painted in the same basic ethical broad-brush strokes, but parsing the nature and extent of their various effects does require a finer brush - at least if the aim is to persuade intelligent Leftists.

    I wonder whether and/or how he'll respond...

  7. Mike, DEHP (like a number of plastic and plasticizing products) is a goddamn endocrine disruptor; ideally it shouldn't be going into our bodies in any concentration, really.

    If I could I wouldn't buy any food products that had elements coming from China. In my ideal scenario, manufacturers and retailers would need to vouch for country of origin of the ingredients of consumables, and then I could vote with my wallet and avoid all products that have come from that fucking place. Right now, I think we all know that say we buy food or drink that says "Made in Taiwan", it's perfectly possible for all the ingredients to have actually come from China and only been put in the same container here in Taiwan.

  8. "In my ideal scenario, manufacturers and retailers would need to vouch for country of origin of the ingredients of consumables, and then I could vote with my wallet and avoid all products that have come from that fucking place."

    Well the only way you are going to get that information, if at all, is through a sufficiently competetive market for regulation. A manufacturer may collude with a regulator in order to conceal that his products include dodgy ingredients from China, but the risk of this being exposed ought to make the regulator think twice given sufficient competition (or even potential competition).

    Right now, every time this sort of thing happens it creates pressure for the FDA in Taiwan to seek the cooperation of the FDA in China. There is a political angle to this which cannot be eradicated simply by throwing more money at the FDA. As Okami said above, the real story is in how this information about DEHP was exposed and by whom...


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