Crony capitalism

Gov't Attacks A Vegan Mayo, Ends Up With Egg On Its Face

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BY JOHN MERLINE

11/05/2015 04:12 PM ET

Hampton Creek Foods CEO Josh Tetrick holds a species of yellow pea used to make Just Mayo, an egg-free plant-based mayonnaise, in San Francisco. View Enlarged Image

Arecent news item noted that a start-up egg-free-mayonnaise company is now selling more of its Just Mayo product in Wal-Mart than in Whole Foods. It's an example of how the free market fuels innovation to meet consumer needs, even if it's a lowly sandwich spread.

So why was the federal government trying to strangle Just Mayo in its cradle?

Earlier this year, the UK-based Guardian unearthed a trove of emails showing that the government-run American Egg Board was working with officials at the U.S. Department of Agriculture to destroy Hampton Creek's new product.

The AEB, which is funded by egg producers, was set up in 1974 to promote the egg industry.

Among the 600 pages emails uncovered were those showing that the then-head of the AEB, Joanne Ivy, was advising Unilever — maker of Hellman's brand mayonnaise — in a lawsuit against Hampton Creek, saying in one of them that she provided "basic information that was helpful." She also apparently tried to help stop Whole Foods from selling Just Mayo.

In addition, the emails show that early last year, the USDA's national shell egg supervisor — yes, there is such a position — suggested that Ivy contact the Food and Drug Administration in hopes of getting them to hassle Hampton Creek. (The FDA is now trying to get Just Mayo to change its name because it doesn't contain eggs.)

Why would the government-run American Egg Council, or the USDA for that matter, care about a little company in San Francisco?

Because Hampton Creek's egg-free spread was starting to catch on. And to the extent that its sales increased, egg sales might decline. In one email, Ivy described Just Mayo as "a crisis and a major threat" to the egg industry.

Now, as a result of this scandal, Ivy is gone from the American Egg Board, and the USDA is investigating whether that organization violated federal law in its campaign to thwart competition.

Instead of investigating the American Egg Board, why not dismantle it, along with the USDA positions that meddle in this industry?

This story is a case study in how government regulators and agencies thwart innovation to protect existing businesses. And as long as those outfits remain in business, future competitors will be at risk of the same sort of anti-competitive, anti-consumer harassment.