Obamacare’s Calorie Mandate Takes A Bite Out Of Consumers Wallets

Will Coggin Senior Research Analyst, Center for Consumer Freedom
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Just in time for World Health Day, the food police are preparing to launch new calorie-label regulations that will be coming to a restaurant near you.

After years of delays, the Food and Drug Administration (FDA) finally released its menu labeling requirements last fall. Even though the agency issued “final” rules, there is still uncertainty about how exactly these regulations will be enforced and whether they’ll actually encourage Americans to eat fewer calories — meaning this has the looks of another costly and unnecessary government mandate.

Menu labeling, one of the new Obamacare regulations to take effect this year, will require restaurant chains with 20 or more locations that trade under the same name to display the calorie counts for every food item on their menu.

It might sound pretty simple (and helpful) to include calorie counts on menus, but complying with the FDA’s 319-page tome of rules is anything but straightforward.

Consider pizza, a popular food choice for American consumers. Under the proposed regulations, pizza chains will have to display the amount of calories for every single combination of toppings that a customer could order on a single slice. The more choices that your favorite pizza chain offers, the more costly it will be for them to comply with the FDA’s requirements. Government at its finest.

And if your favorite chain restaurant serves alcohol, they may be in for a regulation-induced hangover. The FDA hasn’t explicitly stated whether menus must display the calories for the exact type of alcohol (a particular beer, wine, or spirits brand) or if it’s sufficient to include a range of calories typical for that type of beverage.

Due to the complexity of this regulation, many restaurants are pushing the FDA to allow business owners to list calories typical of a chardonnay or a lager rather than obtain exact calorie counts for every single beer on the menu. As with pizza, restaurants could face higher costs and headaches for offering more choices to customers.

Complying with these laws isn’t cheap. In total, the American Action Forum estimates that compliance costs for the FDA’s new regulations could even be as high as $1.7 billion. Even if they are off by 50 percent the costs are staggering!

And who is going to pick up the tab for the FDA’s enormous regulatory bill? You, the consumer.

Much of the compliance costs that the government hands down to chain restaurants will be passed on through price hikes. Alternately, some chain restaurants may choose to scale back their menu options in order to lower their regulatory burden.

Proponents of labeling have tried to justify this cost with the theory that showing calorie counts will help people lose weight. But there’s little evidence that the impact on their waistlines will be as big as the impact on their wallets. Studies of existing menu-labeling laws around the country haven’t found that providing calorie information has much of an effect on consumers’ eating habits.

A study published in the American Journal of Public Health found that New York City’s calorie-labeling law “did not reduce calories purchased, nor did it appear to help participants to better use the calorie information posted on menus.” In fact, the study found some counter intuitive evidence that calorie-counts may have led to the purchase of higher-calorie food items.

A study by the American Journal of Preventive Medicine found that “consumers at one fast food chain in the Seattle area were unfazed by calorie counts.” The Columbia University School of Nursing also weighed in on the matter stating, “the number of sales and average calories per transaction were unaffected” by menu labeling.

Common sense and real world experience tells us that people who order a pizza for delivery are probably not going to be asking for the calorie count when they phone in their order. Voluntary menu labeling is one thing, but years of research has made it abundantly clear that mandatory labeling is just another costly consumer mandate resulting from Obamacare.