Government Regulations in Business

Competing pressures in an industry can affect the quality, quantity of production, and authenticity of a product. Authentic Parmigiano-Reggiano, a traditional cheese that originated in Parma, Italy, contains a seal, or a DOP certification, that confirms it was made by local Italian farmers and artisans. Why does such a thing as the DOP certification exist? As a popular item expands in a market, competing pressures can cause it to deviate from its original identity standard. For example, Kraft “100%” Parmesan Grated Cheese is a massed produced American version of Parmigiano-Reggiano that deviates from the cheese’s cultural character. The American government, specifically the FDA, regulates food labels that involve a food’s cultural identity. Moreover, the FDA originally granted Kraft a permit allowing them to label their cheese as 100% grated parmesan cheese for market testing, and then extended the permit. Without this permit Kraft would have not been able to do so, exemplifying the power government regulation has in the food industry. This situation causes cheese-producing businesses to be influenced by the social concern of culture loss. Cheese companies producing non-authentic parmesan cheese may market their cheese as more authentic than it really is, or their sales will drop from customer dissatisfaction. Some companies even have to market their product in a way that differentiates it from the original cultural identity.

There is also an ongoing debate regarding government regulation of businesses for environmental protection. Many individuals argue that government regulation should address environmental protection because the benefits to society and nature would be of higher value than the cost to a company. Additionally, environmental regulation has been proven to improve air and water quality in areas that were populated by polluting companies. Some argue against environmental regulations and for the issue to be left to the free market because of the harm they can do to a company’s production efficiency and investments. In some cases, lower productivity and investment frequency can make conditions worse if it causes a dirty plant to continue operations longer than expected or causes an operation to shift to a less regulated region.