A few years ago, the Mississippi legislature adopted a cottage food operators law, bringing the industry, those who bake goods at home and then sell to the public, into the light.
Cottage food operators, who have annual gross sales of less than $20,000, are given the freedom to sell goodies they bake in their own home, without the government inspecting their kitchen or providing a certificate.
Because of this law, those who had long been baking without asking government now had permission from the state. However, the law is limited. Many states don’t have limits on sales. Mississippi does and such limits are artificially low. Additionally, cottage food operators aren’t allowed to post images of their products for sale on Facebook, Instagram, or anywhere else on the web. These are just two of the many restrictions.
As a result of the internet exclusion, the Department of Health has sent cease and desist letters to the rogue operators who posted pictures of their creations online. The legislature attempted to mend this peculiar prohibition this year.
A bill sailed through the House that would have permitted online postings of food you bake at home. It also slightly raised the cap for gross sales to $35,000. It quietly died in the Senate without a vote.
Who could be against these entrepreneurs trying to earn a living or perhaps making extra money at home? Naturally, the established food industry. The Mississippi Restaurant Association, on their own website, has called the cottage food industry “problematic,” citing “widespread abuse creating an uneven playing field.”
They like to point to the fact that cottage food operators aren’t regulated by the government. That is true. But it that a bad thing? Instead of the cookie police, bakers are best regulated by the free market. An individual who sells an awful-tasting cookie or cake won’t be in business long.
This isn’t much different than the fight to limit food truck freedom. During much of 2018, the city of Tupelo debated restrictions on food trucks that were operating, and thriving, in the city. Were consumers unhappy with the food they were receiving? No, it was the brick-and-mortar restaurants who were unhappy.
The Tupelo city councilmen who were pushing for restrictions acknowledged they were interested in protecting established restaurants. Never mind the fact that any thriving downtown should welcome and encourage food trucks, it is simply not the business of government to prefer one industry, or one sector of an industry, or one participant, over another.
If the residents in Tupelo didn’t want food trucks, there would be no food trucks. All food trucks are doing is responding to market demands. In doing so, they are serving a consumer niche the way any prospering entrepreneur will. Fortunately, the city council relented and didn’t adopt burdensome regulations that would have driven food trucks out of business.
The legislature could have adopted statewide regulations that would have pre-empted local ordinances limiting food trucks, but they, again, decided it was not something they wanted to do.
The legislature also, once again, passed on a bill that would have allowed intrastate sales of agricultural products directly from the producer to consumers and would have prevented local governments from restricting those sales. This would have also opened the door for the legal sale of raw milk for human consumption.
Again, there was a much larger segment of the industry that didn’t want to see small farmers providing competitive pressure. And they won.
Whenever new entrepreneurs enter the arena, whatever that arena might be, the response from the established interests are generally the same. It doesn’t matter whether it’s restaurants not liking food trucks or cottage food operators, the fight waged against Uber and Lyft by the taxi monopolies, or the fight against Airbnb by the hotel lobby, incumbents will always seek government partners to protect their positions. We should recognize it when we see it.
Every incumbent industry will portray their request for protection as merely seeking fairness or consumer safety. But taxpayers are not simpletons; they are on to this game. They understand that much of these regulatory hurdles are about defending the insider’s market.
Unfortunately for consumers, too often the response by lawmakers is to agree to protect the established interests rather than letting the market choose the winners and losers. That was certainly the case this year.
This column appeared in the Commercial Dispatch on March 20, 2019.