Many, if not most proposals that make their way through Congress seem to have comically unsuitable names. However, at the end of this week the House of Representatives is expected to vote on a plan to remove one onerous, unneeded Obamacare regulation. A little known provision within Affordable Care Act (ACA) requires retail food establishments with 20 or more locations to list calories for regular menu items it serves on all signs and printed menus. While consumers might benefit from knowing calorie content, this one-size-fits-all mandate puts a big burden on small food retailers, and it could lead to unwanted price hikes. H.R. 2017—the Common Sense Nutrition Disclosure Act really is a common sense solution to the regulatory problem.
One problem is that a big cost government mandate may not mean big changes in consumer habits. The rule within ACA was intended to address the obesity problem in the U.S., but, as NYU population-health expert Brian Elbel found in his research on the effects of calorie labeling in New York City and Philadelphia restaurants, the requirement may not have any significant effect on customers’ ordering.
Meanwhile, the rule, which was named “third-most-onerous regulation of 2013” by President Obama’s own Office of Management and Budget, would require restaurants, grocery stores, pizza shops, convenience stores, and vending machines to list—on physical menus—the calorie information for “standard menu items.” In addition to the estimated 14.5 million hours it would take retailers to comply with this new rule, the requirements may end up harming small suppliers, such as small craft breweries who’d love to see their products on chain-store menus, but might not be able to afford caloric testing for all of their beers.
For very large companies with menus that are the same throughout the county, these new requirements aren’t that terrible of a burden. But for smaller, regional chains and franchise owners, the costs are significant. As Jason Stverak at Forbes noted, “Although the law is designed to target corporate fast-food giants, in practice it will largely affect individual franchises that effectively operate as independent small businesses . . . [e]ach of these franchisees will now be tasked with complying with the mandate–paying for new signage, removing profit-generating advertisements to make room for the calorie data, updating menus every time recipies (sic) change, and accommodating inspectors.” And the costs will likely be passed along to consumer when they can.
For example, stores whose customers are mostly order-by-phone, like pizza shops, will be allowed to provide the required nutritional information through remote-access menus (i.e., online). It would also allow stores to list caloric ranges and label individual components of possible combination meals.
Perhaps most importantly, the House plan does away with the possibility of criminal penalties for shops that accidentally serve larger-than-expected portions.
This compromise plan would not alter the intent of the ACA provision—the disclosure of nutritional information—but would help in avoiding the unintended quagmire of red tape and costs that could harm small businesses and reduce choices and increase prices for restaurant-going consumers.