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Nutrition labeling a burden?

A study by Duke University's Fuqua School of Business found that the nutrition labeling mandated by the 1990 Nutrition Labeling and Education Act may have had the unintended consequence of driving out small food companies in some categories.

Leading food companies also had an edge in product distribution after the law took effect in 1994. The study examined grocery store sales from 1993 and 1995 on 29굖 food firms and checked supermarket data over several years and also studied nonfood categories not subject to NLEA.

The study concluded that the major food companies benefited disproportionately, because their resources, customer awareness, and distribution power enabled them to respond more quickly and effectively to the new disclosure requirements. The study said its findings implied that policy makers should “piece together the consumer, brand, and firm effects of standardized information disclosure” to understand the full effects on consumers.

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