As someone who works for a free market economic think tank I find it difficult to argue against calorie labelling on alcohol products. Consumer ignorance is a form of market failure and if there is evidence of widespread ignorance about important facts, it can justify government action.
In my view, nutritional information on food and drink meets this criteria. The information should be unobtrusive and not resemble a 'warning', but it should be there for those who are interested.
The case of calorie labelling on alcohol, which the European Commission is currently looking into, raises interesting questions about how much information should be mandated by the state and how much should be sought out by the consumer.
The packaging of any product is private property and the government needs a compelling reason to commandeer it. Some people in the drinks industry have pointed out that nutritional information is readily available online (including on their own websites). Further health information is available on television, in newspapers, schools, doctors' surgeries and many other places.
While it is true that people have ways of educating themselves without the government plastering information on every piece of packaging, the same argument could be used to oppose any form of product labelling.
There are certain basic facts that it is reasonable to expect a manufacturer to provide, if only to make their customers' lives easier. On the other hand, the mere fact that information is accurate and neutral (as calorie counts are) is not sufficient reason to mandate it on every wine bottle. If every piece of accurate information was written on a product's packaging it would require a very small font to fit it all on.
We must ask ourselves what we want to achieve through labelling. The goal is - or should be - to provide consumers with enough information to make a rational choice according to their preferences. It is possible that more information could lead to greater consumption of a product, although this is not the intention of the 'public health' groups that are currently lobbying for alcohol labelling.
They would like to go much further and place cigarette-style health warnings on alcohol, such as 'Alcohol Causes Cancer', with the express purpose of deterring people from drinking.
An argument could be made for some form of health warning if there was good evidence that (a) many people are misinformed about certain risks, (b) those risks are meaningful and well-proven, (c) the warnings would make a difference to patterns of behaviour, and (d) it is not possible to effectively transmit the information by other means. In most cases, however, the case for warning labels fails to meet at least one of these criteria.
On a practical level, consumers who are given too many warnings might get 'warning blindness' and decide to ignore them all. This seems to be happening in California where a vast number of products are labelled with the warning that they 'contain chemicals known to cause cancer and birth defects'.
When health warnings are ubiquitous, consumers find it difficult to distinguish between serious risks and minor hazards. 'Smoking causes lung cancer' and 'Alcohol causes breast cancer' are both evidence-based claims insofar as they reflect an increased risk of contracting the diseases according to epidemiological research, but the risk from drinking is very small compared to the risk from smoking.
Smoking causes around 70 per cent of lung cancer cases whereas drinking causes only around six per cent of breast cancer cases, and the evidence for the former is more robust than for the latter. Unless risks are put into context, there is a likelihood that consumers will make personal trade-offs based on an exaggerated perception of the hazards, which is to say they will consume less than would be optimal for them.
A genuinely informative health warning on alcohol might explain that 11 million adults in my home country of the United Kingdom drink at a 'risky' level and that there are 9000 alcohol-related deaths a year, meaning that risky drinkers have a 0.08 per cent chance of dying of an alcohol-related cause each year.
If given this information, most consumers might conclude that a 'risky' level of drinking is not very risky at all. For that reason, such a warning is never likely to be implemented despite being accurate and arguably useful.
But we are getting ahead of ourselves. The question for now is about nutritional information and, from an economist's perspective, this is unproblematic. The information is neutral, accurate and potentially useful to many people. More survey evidence is needed but I suspect that it would correct an information asymmetry (i.e. manufacturers know how many calories their products contain but most consumers do not)and the cost of implementation is, I assume, quite low.
It is possible that some people would get less pleasure from drinking if they knew how many calories they are consuming, but that would be a rational response and is no reason for inaction. Ironically, the strongest objections to calorie labelling for alcohol do not relate to economics but to health.
There are plausible concerns that it will cause weight-conscious drinkers to skip meals and that the market will move away from beer and wine in favour of (lower calorie) spirits. These, too, could be rational responses, but they are not necessarily healthy ones. The issue is not as simple as it seems and health campaigners should be wary of unintended consequences.