Who could have seen this coming? Well, besides anyone who actually paid attention when it first became known that the ObamaCare law contained a hidden mandate that forced food-selling chains of 20 or more locations to post calorie counts of every item for sale, a fact that only came out after the bill’s passage. Three years later — three years? — the FDA is still trying to figure out how to implement it … and failing:
Diners will have to wait a little longer to find calorie counts on most restaurant chain menus, in supermarkets and on vending machines.
Writing a new menu labeling law “has gotten extremely thorny,” says the head of the Food and Drug Administration, as the agency tries to figure out who should be covered by it.
The 2010 health care law charged the FDA with requiring chain restaurants and other establishments that serve food to put calorie counts on menus and in vending machines. The agency issued a proposed rule in 2011, but the final rules have since been delayed as some of those non-restaurant establishments have lobbied hard to be exempt.
While the restaurant industry has signed on to the idea and helped to write the new regulations, supermarkets, convenience stores and other retailers that sell prepared food say they want no part of it.
The “restaurant industry” didn’t sign on to the idea. The largest players in the restaurant industry supported it, because it gives them a large competitive advantage. Their menus are stable, and they can test once and apply the results to hundreds or thousands of locations nationwide, driving the cost per location downward in comparison to smaller chains that have to expend the same cost. Furthermore, the need to test will discourage innovation in offerings, as the cost to determine calorie counts will inhibit flexibility.
This is exactly why trade groups — which usually represent the biggest players in any market — support government interventions like this. It creates a situation where government interferes in a way that exaggerates the benefits of cost distribution and forces smaller players to raise prices faster, making them less competitive and more likely to fail or sell out.
And now, the FDA is finally realizing that it’s nearly impossible for retailers and restaurateurs to keep up with calorie counts, which is why the rule is “extremely thorny.” As recipes change and sources for ingredients evolve, the maintenance alone will be a nightmare for all but those who control the entire distribution chain for their products — in other words, the McDonalds, the Burger Kings, and so on. I guess that must be what the Obama administration has in mind for improving the health of Americans through this mandate. Let’s also not forget that putting calorie counts on menus doesn’t actually change behavior anyway.
As for who could have foreseen this, let’s go back three years to this video I did with Ken Schelper, VP of Davanni’s, a local pizzeria chain, to see how it impacted their planning after the mandate was first revealed:
By the way, if you’re ever in Minnesota, be sure to have one of their pizzas, or anything else on the menu. And be sure to read to the end of the AP article, because Davanni’s has some support from the largest pizza makers in the industry thanks to the near-impossibility of posting calorie counts for every possible combination on pizzas.