Did You Declare That Garlic, Blah, Blah, Blah?

You would expect that question if you try to bring a few of those aromatic cloves into Hotel Transylvania, but in the real world, is this mercantilist attitude not best left in the history books?

Count Dracula isn’t the only bloodsucker with a focus on garlic. Customs officials across the EU are just as interested. They have hunted garlic smugglers for years (the EU imposes a 9.6% import duty on garlic). Consumption of such dangerous substances must be reduced!

According the BBC, this problem has been around since the 1990s. Yes, you read that right, the BBC, not The Onion. The EU pulls no punches over such grave “offences.” In March last year, Paul Begley, the head of Ireland’s largest fruit and vegetable producer, was sentenced to six years in jail over a dastardly 1.6m euros (£1.3m) scam involving the importation of garlic.

Serious business, six years! You wonder how he would have been punished over something like murder? Burned on the stake? Thankfully, some sense was restored and Mr. Begley seems to be able to get out of jail soon.

It is difficult to read the BBC article with a straight face. But the EU is just as serious about this as our own Department of Justice (Orwell approves of the name) was when they investigated Gibson Guitar over their legally exported (from India) and imported exotic woods.

You’d better get your supply chain in order and know where your products and materials come from – there is little rhyme or reason when bureaucrats get involved and you will get squeezed.

Not surprisingly, Sweden, my country of birth, and ever-fond of increased taxation and bureaucracy, has now “cracked one of Europe's more seemingly strange, if lucrative, smuggling rings” – wow, they must have peeled off a few layers to do that.

This whole business is mercantilist poppycock that goes back to the trade wars of the 1600s and 1700s – Europe never learns – and the same stale loaf of bread is now peddled by saying that the law is “meant to prevent garlic growers in EU member states from being driven out of business by Chinese farmers, who have captured large swathes of the global market by producing crops at knock down prices.” So? Maybe China has a better climate, and lots of lower cost labor to produce these bulbous delicacies? Europe would still be busy making horse buggies and plows if the EU had been created before 1895. Additionally, the EU is inconsistent – they have trade deals with a long list of non-EU countries that can export garlic into the EU without the same penalties. Mercantilism again.

Adverse impact – the vampiric bureaucrats might be happy, but a 10% duty (and then around 20-25% VAT on top of that) means that Europeans are under-consuming garlic – it probably impacts the poor, women and children the most. Where is the outrage?

EU officials have the point of view that “smuggling can cost the EU a ‘significant’ amount” – there it is, managed trade, with little thought to the benefit derived in the marketplace by giving consumer better access to less expensive products. Bureaucrats have no confidence in consumers making the “right” choices, but are filled with overwhelming certitude that their planning is superior. Nice.

Enjoy our competitive marketplace – when my sister and husband visited me here in Atlanta over the past Christmas, they were floored by the low prices, high quality, enormous selection and all the rest of it that we take for granted. It’s just another day at the grocery store in the US, but a major experience for someone from Sweden. Sure, you can always find something negative, but over the long haul, Adam Smith lends a helping hand.

Closing with another reminder that you need to know exactly where your products and materials come from – don’t wait until the bureaucrats raid your warehouse. Invest in the systems and procedures now.

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