Menu mandates: Federal regs gone mad
A pepperoni pizza with extra cheese is not what most people would have dreamed was a target for reform in the Patient Protection and Affordable Care Act (PPACA) that passed three years ago. But as then-Speaker Nancy Pelosi pointed out at the time, we would have to pass it to find out “what is in it.” Now we are finding out, much to the country’s chagrin, that in addition to massive new red tape for health care, federal regulators are seeking to take over as editors-in-chief of America’s menus.
Section 4205 of PPACA requires every restaurant (and potentially every grocery and convenience store) with 20 or more locations to conduct a nutrition analysis and label any food prepared on-site, while also maintaining the records and recipes for inspection. For more customizable, made-to-order formats like pizza-delivery chains, that means providing calorie information on menu boards inside their stores for each type of pizza they sell.
Under these regulations, every combination would have to be provided on the menu in some fashion. The regulations permit the use of calorie ranges to account for such diversity, although the utility of this concession is limited given that the ranges could be up to 2,000 calories wide. Also keep in mind that up to 90 percent of pizza customers order remotely by phone or online. Thus, they would never set foot inside the store to view the calorie menu boards.
To make matters worse, the Food and Drug Administration (FDA) has proposed expanding these rules to grocery and convenience stores even though 95 percent of their foods already comply with regulations under the Nutrition Labeling and Education Act. So the FDA rules would double-regulate these stores in order to label individual ingredients at a salad bar that invariably change based on their availability and ripeness.
The estimated costs of complying with these regulations are staggering. According to the White House Office of Management and Budget, the regulations would require 14.5 million compliance hours. Beyond that, the Food Marketing Institute, which represents the nation’s grocery supply industry, estimates that the cost to stores would exceed $1 billion in the first year and hundreds of millions of dollars thereafter.
These costs are all the more intolerable when you consider that the stores impacted by these regulations are often operated by small business owners and run on tight profit margins — usually around 1 percent. According to the National Association of Convenience Stores, 60 percent of convenience store operators own just a single store. But because many of these small businesses operate as a franchise, they will be unable to avail themselves of the law’s small business exception, even though they are equally burdened by the requirements.
The FDA could implement the rule before Congress reconvenes next year, so I’ve worked with my colleague Henry Cuellar (D-TX) and several other members of Congress from both parties to protect small businesses and the public from these nonsense regulations by introducing the Common Sense Nutrition Disclosure Act of 2012 (H.R. 6174). Similar legislation has been sponsored by Sen. Roy Blunt (R-MO) and other senators as S. 3574. Both afford business owners the flexibility they need to give the public access to nutritional information without hurting their businesses.
H.R. 6174 is not intended to eliminate restaurant establishments’ responsibility to be transparent with their customers; it just takes a common sense approach to the calorie issue. The bill grants restaurants the ability to provide information in a way that makes sense for their customers.
For example, the legislation would allow pizza restaurants to give calorie information by the slice rather than for the whole pie and to list calories for standard and popular pizza builds, instead of every possible combination. Do we really need a federal disclosure mandate for a banana and anchovy pizza?
In cases where businesses operate via delivery, this bill gives franchise owners the option to disclose nutritional information online or by other effective means. It ensures that establishments that already provide nutrition information on the vast majority of foods sold, like grocery and convenience stores, are not unnecessarily double-regulated under this menu-labeling regime.
Lastly, the bill provides important protections for small business owners against frivolous class-action lawsuits by recognizing that restaurant food is handmade, varies based on available ingredients and may not conform to exact specs like food that is made in a factory.
In the midst of fiscal cliffs, regulatory avalanches, and a health care Armageddon, most Americans would agree we should be focusing on topics of greater import than restaurant menus. It is rare that we find true bipartisan issues, but this is one, and one that can be solved through passage of the Common Sense Nutrition Disclosure Act.
U.S. Representative John R. Carter, a Republican, represents Texas’ Thirty-First Congressional District.