Business

Pizza Shops Still Fear Obama Regulation That Could Cost Billions

A menu labeling rule included in the 2010 Patient Protection and Affordable Care Act, commonly known as Obamacare, has pizza shops and convenience store owners worried.

The rule, which would require calorie counts on store menus, has been delayed several times already due to the complexity of the issue.

As the Food and Drug Administration (FDA) completes new guidance for stores and restaurants to comply with the rule, many business owners are concerned the rule will damage businesses, increase operating costs, and potentially expose employees to criminal charges and civil lawsuits.

“There are certain things that cannot be fixed with guidance,” Lyle Beckwith, senior vice president of government relations for the National Association of Convenience Store, told The Daily Caller News Foundation.

As written, the rule would require stores that sell food to publish calorie counts for all ready to eat items. An infographic describing that consumers can expect to see calorie counts on food items at sit-down restaurants to drive-through windows to grocery and convenience stores and “take-out foods, like pizza.”

The model works well in restaurants like McDonalds, for example, that already post calories next to the price of preset menu options. The rule is harder to implement at pizza shops such as Domino’s, where customers are used to customizing orders, that offers 34 million different ingredient combinations.

The Obamacare mandate requires the food seller to display calorie counts for all items on the menu, and threatens fines to the store, open up stores to litigation, and could conceivably result criminal charges for employees at stores that don’t comply, according to industry groups.

People working part-time jobs “could potentially be felons for putting too much cheese on a hoagie,” Beckwith said.

The guidance for restaurants say one thing, but the rule, as it’s written, could be interpreted differently and place business owners in a tough spot: either trying to comply completely with the FDA’s rule or following the FDA’s guidance. The law and the rules for implementation “could be interpreted in many different ways by many different people,” Chris Reisch, a Domino’s franchisee in Kentucky, told TheDCNF.

The rule was supposed to go into effect early last May, before President Donald Trump’s FDA commissioner Scott Gottlieb was finally confirmed May 9. The FDA delayed the rule for another year until May 7, 2018, and vowed to update the guidance but said it would not rewrite the rules.

The window for comments on the rule closed Aug. 2, and now the industry is awaiting the updated guidelines for how the FDA plans to enforce the rule. The agency will release the new guidelines at some point this fall, Gottlieb told Politico in September.

A spokeswoman for the FDA told TheDCNF that the new guidance will be released by the end of the year.

While the industry waits for the new guidelines, they continue trying to convince congress to act. “We want a change in the legislation, and a change in the rules,” Reisch said.

Without a change in legislation, businesses like Domino’s and the many stores Beckwith represents will likely be put in a costly dilemma. “We don’t want to get out of this,” Reisch said. Many have opposed menu labeling, however, Reisch admitted that this is the direction the country is going.

“We all know menu labeling is here. It’s something we want to do. We want to provide it to customers,” Reisch said.

For customizable pizza shops like Domino’s the prospect of complying with the rules and guidelines as written seems “impossible.”

Fitting the calories for each option on the menu board behind the store counter doesn’t make sense, so Reisch described a different, equally unworkable way to present the required information. “You would have to have a huge book at the counter that says here’s the crust, here’s the calories for each crust,” Reisch said, and plug it into a calculator. Then, choose your sauce, one of six different cheeses, and toppings, and add up the calories.

Implementing the current rule doesn’t make sense for the Domino’s in-store model, and the chain already has an online tool that calculates the total calories of custom pizzas as a customer orders.

Updated guidance may help, but the best solution would be a legislative fix that is being considered in the Senate, according to Beckwith. Without the legislative fix, complying with the regulation would cost convenience stores $84 million a year, and cost all American businesses around $306 million annually, according to a study commissioned by the National Association of Convenience Store and released earlier this year.

“Quite frankly, people are still scratching their heads on how to comply with it,” Beckwith said. “We’re very concerned that guidance will do anything at all substantively to change any of this.”

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