by Esther Baruh, NATO Government Relations Manager, and Todd Halstead, NATO Consultant
For more than 20 years, policy makers at every level of government have pursued political solutions to reduce the nation's skyrocketing obesity rates. On their face, the objectives of these lawmakers are pragmatic. Obesity-related conditions, including heart disease, stroke, type 2 diabetes, and certain types of cancer are some of the leading causes of preventable death. Obesity also has an immense economic impact. The Centers for Disease Control (CDC) estimates that the annual medical cost of obesity in the United States was $147 billion in 2008. Individual medical costs for people who are obese were $1,429 higher than for those of healthy weight.
In an attempt to reduce the burdens of these staggering statistics, policy makers have turned their attention to regulating American food consumption. Food and beverage manufacturers and retailers are in the throes of digesting the federal government's latest attempt at changing habits through legislation. The U.S. Food and Drug Administration (FDA) recently issued an expansive final rule on calorie labeling. The rule requires an establishment serving "restaurant-type food" with 20 or more locations to disclose calories on menus and menu boards, with additional nutritional information to be made available upon request. The FDA was charged with this rule making with the passage of the Affordable Care Act, in which Congress mandated calorie labeling for restaurants and similar retail food establishments with 20 or more locations.
Unfortunately, to paraphrase former senator and presidential candidate George McGovern, politicians who haven't run a business can be bad at the business of regulating. The late McGovern learned the hard way about the impact regulations can have on businesses. After leaving the Senate, he acquired the leasehold on Connecticut's Stratford Inn, which led him to wish he had had that firsthand business experience while in office. "In short, ‘one-size-fits-all' rules for business ignore the reality of the marketplace," McGovern wrote after the inn went into bankruptcy.
The FDA's new rule is wide ranging, covering businesses and food items that were exempted in the proposed rule issued more than three years ago. The blanket rule also overlooks the complicated nature of business operations. Particularly for movie theaters, which are increasingly experimenting with dine-in concepts and luxury cinema service, the rule presents many challenges and requires near-Talmudic interpretation to be successfully implemented. And it's not clear whether implementing this new rule will truly yield a change in public consumption.
While advocates claim menu labeling leads patrons to make informed and healthier choices, the FDA has failed to provide evidence that the regulation's costs-expected at more than $1.2 billion with 498,508 hours of paperwork-are justified by corresponding benefits to consumers. Despite many states and cities having implemented their own labeling mandates, studies do not uniformly find that consumers faced with calorie information on menus and menu boards change their eating habits. A 2013 National Institutes of Health study found no change in calories purchased after menu labeling was introduced in Philadelphia in 2010. Less than half of customers reported noticing the calorie counts. The study also discovered that the number of visits to fast-food restaurants did not change.
Advocates claim such data are inconclusive because menu labeling is a relatively new phenomenon. They are right. To gauge the ability of food labeling to rein in America's waistline, one needs only to look at the effect of the Nutrition Labeling and Education Act (NLEA). The crowning health policy achievement of the 1990s, the NLEA requires most packaged foods to bear a Nutrition Facts panel containing basic per-serving nutritional information. Despite an FDA study that indicates 66 percent of consumers reported using the food label to determine food nutrients, data suggest the NLEA's implementation in 1994 has largely been unsuccessful at impacting the dramatic rise in adult and youth obesity rates. The CDC cites estimates that obesity in the United States has more than doubled in children and quadrupled in adolescents in the past 30 years. As of today, more than one-third of children, adolescents, and adults are overweight or obese.
Surprisingly, there has been little empirical research evaluating the impact of the NLEA on obesity in the United States. The only comprehensive study, conducted by researchers at the National Bureau of Economic Research in 2006, found that the NLEA labels had a slight beneficial impact on only one demographic group: non-Hispanic white females. The study did estimate that the total monetary benefit of the decrease in body weight for that group was up to $166 billion over a 20-year period, far in excess of the costs of the NLEA.
The murky question of calorie labeling's benefits has not gone unnoticed in Congress. Republican representative Cathy McMorris Rodgers (WA-05) stated that the agency had "acted recklessly" by mandating regulations without considering the impact they will have on employees, business owners, and local economies. Movie theaters are among the industries that will experience the "extreme cost" of adhering to the regulations, she warned. McMorris Rodgers is the sponsor of the Common Sense Nutrition Disclosure Act, a bill that would predicate inclusion in the rule on 50 percent of a retail food establishment's total revenue coming from the sale of food. Her bill will not see action before the end of the 113th Congress; neither will companion legislation in the Senate sponsored by Senator Roy Blunt (R-MO), despite the bipartisan support enjoyed by both bills. While members of Congress are sometimes unwilling to push for legislative fixes while an agency is still engaged in the rule-making process, the publication of the final rule has sparked renewed efforts in this regard. A coalition of food retailers will likely push for the bill's reintroduction and passage in the 114th Congress. NATO is among the associations looking at possible legislative fixes.
NATO's work on the rule won't be limited to seeking congressional solutions. We aim to serve as a primary resource for impacted members on a range of needs, including partnering with other associations on labeling materials and communicating member concerns with the FDA. If you operate 20 or more locations, regardless of whether your company has already implemented menu labeling, or you are just beginning the process of incorporating calorie counts in your facilities, NATO's team is here to help you. For more information, please contact our Washington, DC, office at 202-962-0054.