Consumers’ right to choose among different brands and regulators’ intent to control our consumptions clash more often than would think. Singapore banning certain acronyms such as IQ and cartoon figures likes teddy bears from baby milk powder is just one of the latest threats to brand and labeling freedom.
Public health officials are also pushing private companies to reduce sugar levels in beverages and declared an ‘official war on diabetes’. If Singapore follows the lead of other jurisdictions it would not be surprising if they soon call for advertising bans of unhealthy food, higher taxation, and warning labels. As Cicero already said ‘in times of war, the law falls silent’. In this war brands and freedom of expression could become the victims.
These infringements of brand freedom might be perceived as isolated events but by looking at the big picture one can identify a trend towards a more authoritarian approach to brands and therefore constraints to free expression. And the ball is rolling in Singapore: Plain packaging for tobacco products is currently being discussed in Singapore despite clear evidence from Australia showing that it did not lead to lower smoking rates. Data from other countries actually shows that smoking rates event went up.
Legislating bans for certain brands leads consumer choice and commercial freedom on a slippery slope away from the market economy and towards the planned economy. The history of brands shows us why they are important for consumers and how consumers have suffered in regimes that outlaw brands. A recent study estimates that banning the brands of alcoholic and sugary beverages would lead to an economic loss of $250 billion (328 billion SGD).
While some anti-Capitalists claim that brands are an invention of corporate exploitation, the opposite is actually the case. Brands began as a self-regulating form of consumer protection. As a result of urbanization, people moved to larger cities and therefore didn’t have the quality certainty they once did in their one-shop village. Entrepreneurs filled that gap of trust by offering branded products consumers were certain about. Business owners have a huge incentive to maintain the quality level of their branded products – it’s the value of their brand. Companies utilize brands in order to build and retain customer loyalty.
In developing countries, the arrival of foreign brands points to an increase in quality and competition from which consumers gain. Brands have value only where consumers have choice, therefore brands are an indicator for how open a society is. Brands stand for freedom. The absence of brands in public life stands for a world like that of the Soviet Union, in which consumer choice and competition have no role.
Totalitarian communist regimes traditionally consider brands an “enemy of the people.” Brands and logos do not exist and every consumer gets access to equally poor and unbranded products. This is plain packaging for everyone and everything.
It is no surprise that there’s a strong correlation between the level of how developed brands are and the quality and diversity of goods. All products in a given store look the same in a brand-free society, leaving consumers without choice. When brands are prohibited, businesses do not have the incentive to invest in improving or even maintaining the quality of their products. Black markets with counterfeited products of inferior quality thrive in countries that limit brands. This is harmful for consumers and only good for organized crime.
In a market economy, brands enable competition and diversification of products and services. The more we limit brands the more we move to a grey, collectivist, and unfree society. Every consumer benefits from brands.
Brands provide consumers with product safety information and individualism at the same time. If they don’t provide value to customers, those brands will disappear. Brand freedom means the rule of law and allowing freedom of commerce. An attack on brand and labeling freedom is a direct attack to the market economy and mutual voluntary exchange in the marketplace. Therefore, any regulatory infringements on brand freedom need to be stopped in order to keep places like Singapore shining beacons of commerce and the rule of law.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Singapore Business Review. The author was not remunerated for this article.
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Fred Roeder has been working in the field of grassroots activism for over eight years. He is a Health Economist from Germany and has worked in healthcare reform and market access in North America, Europe, and several former Soviet Republics. One of his passions is to analyze how disruptive industries and technologies allow consumers more choice at a lower cost.
Fred is very interested in consumer choice and regulatory trends in the following industries: FMCG, Sharing Economy, Airlines. Among many op-eds and media appearances, he has been published in the Frankfurter Allgemeine Zeitung, Wirtschaftswoche, Die Welt, the BBC, SunTV, ABC Portland News, Montreal Gazette, Handelsblatt, Huffington Post Germany, CityAM. L’Agefi, and The Guardian.