Restaurant chains and many grocery stores could soon feel a financial pinch with the release of the Food and Drug Administration's new menu labeling requirements under Obamacare.
Section 4205 of the Affordable Care Act requires nutrition labeling of "standard" menu items for chain restaurants with 20 or more locations.
The measure also applies to "similar retail food establishments," such as convenience stories and groceries. That particular language is sparking an outcry from some in the food industry, although a final ruling on the specifics of the requirements is not expected until the end of the year.
As the law is currently written, grocery stores with deli services and convenience stores that sell prepared foods would have to comply with the labeling requirements.
"FDA's proposed menu labeling rule imposes a billion-dollar burden on supermarkets, with no additional, quantifiable benefit to supermarket customers, according to FDA's analysis," Jennifer Hatcher, senior vice president for government and public affairs at the Food Marketing Institute, said in a statement.
Some call the Restaurant Menu Labeling Rule a massive government intrusion, while its proponents, citing the high cost of adult and childhood obesity, say its intent is to help consumers eat healthier foods when dining out.
"It's bad enough for restaurants, but worse that the FDA would try to overreach and add convenience and grocery stores as well," said Daren Bakst, a research fellow in agriculture policy at the Heritage Foundation who decried the labeling issue as a "big government approach" to nutrition.
"The research is at best unclear and some of the most prominent studies are showing that in fact it's done the opposite in terms of reducing calorie intake — it's actually increased it," Bakst said.
The costs to businesses if the rule is finalized could amount to $1 billion in the first year it is fully implemented, Bakst noted, citing supermarket industry figures.
The FDA, however, has estimated a cost of $537 million for the initial year rollout, with recurring costs up to $64 million annually.
"The supermarket industry said they are way off," Bakst added. "So who knows what the exact number is. Regardless, the FDA is doing a power grab on them."
Missouri Republican Sen. Roy Blunt and Maine Independent Sen. Angus King have introduced a bill that would limit the labeling law to restaurants only. A companion bill has been introduced in the House.
Separating fast-food chains from grocery stores was applauded by the National Grocers Association.
"The scope of the nutrition labeling provision as proposed by Congress was to provide a uniform standard for chain restaurant menu labeling, not grocery stores," NGA President and CEO Peter J. Larkin said in a statement.
"NGA applauds Senators Blunt and King for introducing this common sense legislation, and we look forward to working with Congress to pass this key legislation and prevent such a large and costly regulatory burden from passing on to our members," Larkin said.
Hatcher, with the Food Marketing Institute, also backed the senators' approach, saying that "by definition, and by almost all preceding food laws, grocery stores are not restaurants."
Hatcher also noted that about 95 percent of grocery store items are already labeled.
"The vast majority of foods in supermarkets are already labeled with complete Nutrition Facts information and many stores are voluntarily adopting more user-friendly guidance on the front of food packages and shelf-tags," she said. "Plus, grocery stores comply with country of origin labeling, allergen labeling, and ingredient labeling."
However, Dan Roehl, senior director for government relations at the National Restaurant Association, said his organization supports the federal menu labeling standards because they represent a national approach. Previously, he said, there existed a "patchwork" of national, state, and local requirements that differed in some cases even from county to county.
"Having to produce a different menu and menu board for different locations wasn't advantageous from a business standpoint," Roehl told Newsmax.
His association remains steadfast in its position that all entities that serve restaurant-style foods be held to the same standard as chain dining establishments.
A study released last month by the Drexel University School of Public Health found that consumers ordered a healthier meal at full-service eateries when labeling information was in place. But it noted that diners still picked high calorie foods.
Overall, the difference between a healthier meal with menu labeling and one without it amounted to about 155 calories, the researchers found in the first field-based survey of the label laws. Diners viewing labeled menus also consumed 224 milligrams less sodium and 3.7 fewer grams of saturated fat.
The study found that 26 percent of all customers used menu labels when they were available. But even those diners ate too much because many restaurant portions are oversized. As a result, diners often exceed total daily need of about 2,000 calories in just one restaurant meal.
"When you compare the average intake with the recommended daily intake, these consumers purchased almost all their calories and more than the recommended sodium and saturated fat in just one meal," said Beth Leonberg, an assistant clinical professor in Drexel's Nutrition Sciences Department and co-author of the study.
The study recommended consumers educate themselves better about nutrition and encouraged them to eat healthier and consume less. The study also called on restaurants to consider product reformulation and smaller portion sizes.
Many Americans may be unaware that restaurant menus are a part of the expansive new healthcare law, Bakst said.
"It is particularly scary because it goes with the government interfering in our lives," he said. "It's the underlying assumption that we can't make decisions on our own and government should help us make the right decisions.
"If the government doesn't think people are making the right choices in restaurants, the next thing will be bans or more aggressive action to try to restrict what people eat," he added."
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