One of the things Obamacare mandates is that restaurants list the number of calories in the foods they sell. This is a huge expense for the restaurant industry, with some estimates saying it will cost “$537 million for all regulated businesses covered under the rule.” If that seems like a lot, consider the Obama administration’s official estimate. They say it run around $1.5 billion.
Put the cost aside for a second. For some restaurants, it’s simply impossible. For example, Dominos Pizza has over 34 million combinations. How is it possible for them to list all of those different pizzas?
While Dominos doesn’t offer them, many restaurants across the country serve craft beer. Beginning next year, if a restaurant chain has more than 20 locations, they’ll have to list the information on the beer on their menus. This mandate also applies to bowling allies, grocery and convenience stores, convention centers and sports stadiums. All places that have beer for sale and a thirsty customer base.
According to Watchdog, smaller breweries are looking to get into those areas are looking at getting hammered, either by the cost of testing their beer or by being priced out of those markets.
“A regional craft brewer or a major brewery can spread the cost over a much larger volume of sales and it’s not so unreasonable for them,” said Paul Gatza, head of the Brewers’ Association in Boulder, Colorado. “Smaller guys that are just trying to sell a keg or two here or there, they have a decision to make on whether it is worth the additional cost to try to get their beers into chain restaurants.”
How much of a cost?
Brewbound says that the testing required to get the calorie count and other nutritional data could cost breweries as much as $1,000…per item.
They cite testing done by White Labs, Inc, out of San Diego. They offer a “nutritional analysis package,” which finds the “caloric, fat, protein and carbohydrate information, among other facts.” The cost is $635, which Brewbound said was cheaper than other testing packages offered by competitor testing labs.
“We have done a ton of nutritional testing in the last six months,” White Labs analytic lab manager Kara Taylor said. “It is a huge cost for every brand and some brewers could end up reducing the amount of brands that make it to bigger restaurants as a result.”
That’s a lose/lose/lose. The customer loses in the number of choices they have and the business loses business while the restaurant loses the opportunity to sell and offer a diverse menu to their customer.
There’s also the problem of regulatory overlap, as noted by Michelle Minton at RealClearPolicy:
the ACA labeling requirement threatens to exacerbate regulatory overlap and sow confusion, Paul Gatza, director of the Brewers Association, which represents smaller brewers, told me. The Alcohol and Tobacco Tax and Trade Bureau (TTB) is the agency that normally handles regulation of beer, including labeling, but the ACA menu-labeling rules bring brewers under the FDA’s authority. “We would like to see a harmonization of the differences between FDA and TTB in how they handle calories,” Gatza said.
The Brewers Association, along with a coalition of other alcohol trade organizations, is asking the FDA for clearer guidance on the new rules. “The FDA allows an exact number of calories for menus and menu boards when the calorie number is on the label, but only allows rounding to the nearest 10-calorie increment if not,” said Gatza. This is different from the TTB’s requirement, which allows for rounding to the nearest calorie increment.”
This is all because moral busy-bodies in the federal government feel we must be told how many calories our main dishes have, as if we’d suddenly be shocked to learn how fattening our favorite main dish was and we’d switched to a wedge salad with a light dressing.
Once again, in an effort to protect us from our choices, the government’s over-reach is having unintentional consequences. And, as usual, it’s the smaller businesses that are taking the biggest hit.
Right now there are lobbyists from pizza groups, restaurant organizations and breweries working to pass legislation to eliminate the labeling mandate. While some are quick to bemoan and demonize business for spending money on politics, this is a good example of why they find it necessary.
If politics wasn’t so involved in business, business wouldn’t have to be so involved in politics.
What do you think of the labeling? Do you think it’s important, or just another silly regulation?
Tell us in the comments.