Menu Labeling a Competitive Advantage for Some

Investor’s Business Daily op-ed echoes NACS sentiment that new rules are an attempt by restaurant chains to gain advantage over c-stores.
June 10, 2015

LOS ANGELES –  In an editorial about menu labeling legislation on this week, Investor’s Business Daily (IBD) makes the same point that NACS has been making in Congress, that menu labeling regulations are supported by national restaurant chains as a competitive advantage over convenience stores and supermarkets.

In fact, the IBD editorial begins by alluding to cronyism, citing national restaurant chains’ opposition to H.R. 2017, the Common Sense Nutrition and Disclosure Act. H.R. 2017, which NACS member Sonja Hubbard testified in favor of last week, would provide needed regulatory relief to smaller foodservice operators. The editorial goes on to refer to the National Restaurant Association’s lobbying efforts as “Washington cronyism at its very worst.”

As proposed, the FDA menu labeling rules require restaurants to post the calorie content for all the dishes on menus and large posted menu boards. It is estimated to cost affected industries up to $1 billion a year, according to the Food Marketing Institute. IBD refers to the “stupidity of the law” as highlighted by Domino's CEO Patrick Doyle, who documented that its strict application would require the pizza company to list calorie contents for up to 34 million types of pizzas with all the variations of sizes, toppings and crusts. Domino's would also have to post these signs in the stores, though about 90% of customers never step inside the store.

“Current law exempts restaurants with fewer than 20 franchise stores. But Domino's and other nontraditional restaurants, such as tens of thousands of small franchise-owned chain grocery and convenience stores, have sought flexibility in complying with the regulation, because it would impose an unreasonable burden on their costs,” writes IBD. “The law they want would exempt companies whose main business is not offering restaurant food and would make pizza and other food-delivery firms list calorie contents online and where customers are likeliest to place the order. As we said, a reasonable accommodation,” the editorial continues.

However, the National Restaurant Association is trying to block H.R. 2017, because the regulatory relief "would create an unfair advantage" for the firms carved out. As IBD points out, “The restaurant trade group is arguing against itself,” explaining that if so many consumers want more information through menu labeling (as the NRA claims), then it’s simply smart business practice to include it and it should not be mandated in the first place.