Regulation can ensure that businesses doing things right can actually complete. How the hell is my local beekeeper supposed to compete against people selling jars of corn syrup?
> Regulation can ensure that businesses doing things right can actually complete
Regulation adds fixed costs. That always increases barriers to entry.
The aim is to make that barrier worth it. (You can also directly mitigate it, but this is less common.) But in the cases of food and medicine, regulation has absolutely forced consolidation. The pitch from Big Pharma and Big Ag when buying out biotech and food start-ups (or small producers) is they've mastered the global compliance network, and can thus scale and thus outcompete small producers.
What it does seem we need is liability by large distributors around selling fraudulent products. That still adds a barrier to entry, since those distributors will have a testing programme. But at least you get multiple programs that have an incentive to reduce costs.
Word of mouth. Not the best option, but it's balanced against the cost of regulation. The cost of complying with regulation (not changes in the product, but proving you comply) can destroy any hope of profit from a smaller business; but the cost doesn't increase at the same rate as business size, so the big businesses have no issue.
Regulations are important, but they have a distinct cost.
