By Daren Bakst
Chain restaurants and their customers will soon feel the pinch of an expensive ObamaCare requirement that has been flying under the radar until now. ObamaCare mandates that “restaurants and similar retail food establishments” print nutritional information on their menus.
The restaurant industry is extremely competitive. If consumers demand menu labeling, restaurants will meet that demand. In fact, many restaurants already do provide nutritional labeling.
But private solutions aren’t enough for menu labeling proponents. The Food and Drug Administration (FDA), which is implementing the menu labeling requirement, tries to justify its rule by claiming that the public (poor fools) are misinformed and simply don’t request “sufficient” information.
In other words, since many people patronizing restaurants are not purchasing the most nutritious meals on offer (as determined by the government), this must be a market failure. One that government must fix. Hence, information mandates must be imposed and expanded until the desired actions are achieved. For the nation’s nutrition czars, if information mandates don’t work, then there must be bans, such as the New York City soda ban.
The entire approach rests on a faulty assumption: that customers fail to select the most nutritious meals available only because they lack information about nutritional content.
In the real world, nutritional information is the last thing most people want to think about when ordering at a restaurant. Going out for a meal is usually an escape, and often an indulgence. Few go to a fancy steakhouse and just order a side salad.
Those who are nutrition-conscious may choose a less healthy option at the restaurant, recognizing that their meal will be offset by other dietary and exercise choices they make during the day. Also, meal decisions at restaurants are usually not an all-or-nothing proposition. Nutrition may be one factor in selecting a meal.
Menu labeling mandates put the cart before the horse. The research on menu labeling is, at best, unclear when it comes to caloric intake. According to the U.S. Department of Agriculture’s Economic Research Service, “The mixed results of these and other small-scale menu labeling studies suggest it is still too early to tell how restaurant calorie labeling will affect caloric intake.”
The ObamaCare menu labeling provision is modeled after a New York City law. New York University and Yale researchers found that individuals ordered more calories after the New York law went into effect. As is often the case when information mandates don’t work, true-believers attempt to blame the failure on insufficient information.
These findings were echoed by another set of researchers studying the NYC law. They recently reported in the American Journal of Public Health:
Providing calorie recommendation benchmarks-such as calories per day or calories per meal-did not reduce calories purchased, nor did it appear to help participants to better use the calorie information posted on menus. In fact, we found some evidence that recommendations may even have promoted purchase of higher-calorie items. [Emphasis added].
If you thought such findings would give pause to the mandaters, think again. Indeed, their proposed rule — which could be finalized this fall or even earlier — embraces a very expansive reading of the law. The relevant ObamaCare provision calls for a labeling requirement to fall on a “restaurant or other similar retail food establishment.” According to the FDA, their rule will apply to grocery stores and convenience stores as well. In practice, the regulatory power-mongers at the FDA have decided simply to ignore the inconveniently limiting word “similar.”
As the FDA sees it, a grocery store which devotes 99.9 percent of its floor space to packaged goods and 0.1 percent to a deli counter is pretty much indistinguishable from a restaurant. Hey, it’s selling food that’s prepared and processed on site, isn’t it?
Also according to the FDA, the first year compliance costs for all regulated parties could be as high as $537 million, with recurring annual costs of up to $64 million. There’s reason to believe the agency may be lowballing here. But the Food Marketing Institute, which represents supermarkets, asserts that first-year compliance costs for supermarkets alone would be over $1 billion.
But what about the benefits arising from the rule? The FDA didn’t try to answer that question. “Food choice and consumption decisions are complex,” the agency explained, “and FDA is unaware of any comprehensive data allowing accurate predictions of the effect of the proposed requirements on consumer choice and establishment menus.”
What we’re left with, then, is a rule that imposes huge, recurring costs without promising any quantifiable benefits.
This costly new menu-labeling mandate should be repealed, and until such time, no money should be appropriated to the FDA for its implementation, including through the complete defunding of ObamaCare. Americans are more than capable of demanding nutritional information, if they so choose. They don’t need the food police to arrogantly dictate what information they need to make decisions at restaurants.
Daren Bakst is a research fellow in agricultural policy at The Heritage Foundation.You can follow him on Twitter @daren.bakst