One of the items buried in the 2700 pages of Obamacare is a mandate for chain restaurants and similar retail food establishments with 20 or more locations doing business under the same name and offering for sale the same menu items to disclose certain nutrition information on menu board so that consumers can make more informed choices about the food they purchase. As a registered dietitian, I have to admit this mandate sounds like a great idea. For years, however, as a health educator, I have been educating consumers on the caloric content of these foods. Many chain restaurants have already put their menu items online for consumers. But when I started research process for this column, it seems that this mandate will be very costly for the food industry which will ultimately be passed onto to the consumers.
On June 28, 2011, the Small Business Administration’s Office of Advocacy filed comments with the Food and Drug Administration (FDA) regarding nutrition labeling of standard menu items in restaurants and similar retail food establishments and labeling of articles in food in vending machines http://www.sba.gov/content/letter-dated-06282011-department-health-and-human-services-food-and-drug-administration.
Food Chains Mandate to Post Calories on Menu Boards: A Costly Endeavor
Under Obamacare, 1,640 chain restaurants and similar retail food establishments which accounts for 276,600 establishments must add calorie information to all menu boards. The FDA has estimated the annual cost at $1,100 per establishment which will cost $315.1 million for compliance and an additional $44.2 million annually. However, many large chain restaurants like Domino’s Pizza have indicated the FDA’s average cost is underestimated with the cost being approximately $4000 per store per year rather than the $1,100 the FDA estimated. In addition, this cost could account for 10% of the average profits per store.
The good news is that all chain menus will be mandated under Obamacare in 2014, to print calorie information for all their menu selections on menu boards. This mandate is designed to help us make better choices for our health. The interesting fact is that most restaurant chains already have the nutritional information on their websites but the lawmakers who created Obamacare must have decided that was not an effective way to communicate the calories to most Americans. The idea is when many Americans see the calories they will choose the lower calorie choice and therefore lose weight which will ultimately decrease the cost of health care as a result.
The bad news is that someone is going to have to pay for the cost of all these new Obamacare regulations and you can bet it will be the taxpayers! Chains would likely increase their prices by an additional 10% to cover all the new regulations. However, maybe less people will be able to afford to routinely buy from these chains when the prices go up so that could effectively help with the health of the low and middle income Americans.
Vending Machines Mandate to Post Calories: A More Costly Endeavor
Vending Machine mandate will affect 10,800 operators which control 4 million to 5.6 million machines that sell covered foods. The FDA estimated that the initial cost of compliance would be $25.8 million with an estimated mean ongoing cost of $24 million. The FDA estimated $2400 per estimated operator cost with the average cost of less than $10 annually. The vending machine industry feels like the FDA also underestimated the cost of the Obamacare mandate. The National Automatic Merchandising Association (NAMA) estimated that a vending business with 20 machines may average an annual profit of ONLY $3,559.20. With more than 300 designs in vending machines, the costs of compliance increases which was not calculated into the FDA estimated cost. In addition, the FDA did not take this into account or the fact that machines are restocked and serviced at least every 5 weeks. The NAMA said that during this restocking individual snacks and drinks could be replaced which would increase the cost of the mandate. A more frequent restocking could occur in an estimated 1.3 million snack machines. The NAMA estimated “a typical vending machine will have to be re-labeled at least 10 times per year (every 5 weeks) and potentially 17 times a year (every 3 weeks).” In addition, the proposed 1-year compliance requirement is not a sufficient amount of time for the industry to be able to afford the cost all the new regulations and have requested a more realistic compliance period of 2-years.
The good news is the person who regularly eats from a vending machine will have access to the calories in each product they purchase. The hope is a better healthier choice will be made to help decrease the risk of obesity, high blood pressure, diabetes and heart disease. The bad news is that the price may be doubled in order to accommodate all the new mandated regulations under Obamacare. But Americans would be wise just to save their money and bring their healthy choices from home to work. But where does that leave the owners of vending machines? Looking for a new job!
Whatever Happened to Personal Responsibility?
All of the calories for most food chains can already be found online. The fact that the cost of eating out will go up because of the Restaurant Labeling Mandate is a given. The food industry will probably pass the cost onto the consumers. On the health-side, this may mean less people will be able to afford to eat out as often and thus be forced eat more healthfully at home. As for the Vending Machine Mandate again the compliance cost will probably be passed onto the consumers as well. When the cost of the vending machine food goes up, consumers may decide to bring healthier food from home and forego the trip to vending machine thus saving calories and money, too.
Barbara Day, M.S., R.D., C.N, is a registered dietitian (www.DayByDayNutrition.com) who has been teaching healthy lifestyles strategies to consumers for over 35+ years. Check out Barbara’s new healthy lifestyles website: www.KentuckianaHEALTHwellness.com.