Five years in, pizza chains find ObamaCare menu mandate still half-baked

Five years ago, we discovered one of those hidden items in ObamaCare that Nancy Pelosi promised we’d only see after the bill got passed — and she was correct. The bill included a federal mandate for restaurants with 20 or more locations to post calorie counts on menu items, even though research since passage of ObamaCare suggest that calorie counts on menus don’t change consumer behavior at all. It does change the overhead for restaurants and their ability to expand and change their menu offerings, and nowhere is that problem greater than in the pizza industry. Dylan Scott reports for National Journal that the largest chains have finally begun to work on Congress to get rid of the mandate, or at least provide an exception for a sector where almost every purchase is a custom order:

This is Big Pizza’s beef: People order pizza by phone or online. (Liddle pressed this reporter on how he procures his pies. Usually through a mobile app, for the record.) The industry estimates that only 10 percent—and Liddle said it could be even as low as 2 percent—of their customers are actually going to see the calorie information that they put up in stores. Because of that, they didn’t initially expect the FDA to mandate calorie counts on pizza places’ physical menus. But that’s what the final regulation requires.

“Very few people walk into a pizzeria, look up on a menu board and say, ‘Hmm, what will I have?'” Liddle said in an interview. “We don’t want to not do labeling. We do it already. We don’t want to get out of it. We want to do it. We want to do it in a way that makes sense for our consumers, that they can understand, and we want to do it in a way that won’t burden our small-business franchisees.”

Under the FDA rule, Liddle said, the small-business owner of a Domino’s franchise is going to have to spend a couple thousand dollars posting the information and it might not even help those select few customers, anyway. Domino’s has 34 million different pizza combinations; Liddle believes Pizza Hut has tens of millions more. The industry therefore argues that nobody is going to get anything out of the huge calorie ranges that its members are going to have to post on the menus at their stores to cover all the possibilities and comply with the rules.

So the American Pizza Community thinks it has a solution. It supports a bill introduced last month by Rep. Cathy McMorris Rodgers, the No. 4 Republican in the House, and Democractic Rep. Loretta Sanchez that would revise the ACA’s menu rules. Restaurants where a majority of orders are made off-premises (read: pizza places) could post their calorie information online to comply with the law. That way, the industry argues, customers could get the information where they’re ordering. Domino’s put out a video last week of customers complaining about the regulations to try to build some momentum for the legislation.

That’s a start, but it’s long overdue. Smaller chains have made these appeals for years, far longer than the two years Scott cites with Domino’s. Like most kinds of regulatory burdens, this mandate provides a much larger burden for smaller chains, and so gives the larger chains a competitive advantage. Only in the last couple of years have the biggest chains realized that the burden was so extensive that it outweighs the competitive advantages they get, and now they want Congress to act on the issue.

In 2010, I first reported on the impact the menu mandate had on smaller pizzeria chains, and the ludicrous intrusion into private transactions that had nothing to do with the provision of health care. This was an early sign that progressives would use ObamaCare and its mandates to push their social engineering agenda by tying as much of it as possible to health outcomes. I interviewed Ken Schelper, VP of Twin Cities pizza-sandwich chain Davanni’s, to discuss the impact of the mandate — and how Davanni’s already had a better solution in place for its customers:

Note that Schelper offered the solution in 2010 that the large pizza chains are now pushing — a countertop terminal to calculate the nutritional information for in-store custom orders. Most if not all of them have the calorie counts on their websites. By now, pizza chains could do the same thing with a smartphone app, and perhaps some do. Yet the “food police,” as Domino’s Pizza exec Lynn Liddle calls them, have refused to budge even in this common-sense instance. That’s a measure of how much this is about social engineering and burdening those who produce food of which the elites disapprove, and how much of it really relates to informing consumer choice. After five years, though, the burden will be on those who want to change the status quo rather than defend it … which is exactly what the social engineers wanted in the first place.