Calorie display mandates threaten business health
My colleague Rituparna Basu recently mentioned another one of the destructive business regulations buried in the Affordable Care Act: the calorie display mandate, which forces all restaurants, bakeries and other food sellers to display the calorie content of their food. This is another restriction on the freedom of businessmen in these sectors, as it bans selling food without also carefully researching its caloric content and prominently displaying the findings on menus.
Providing information that is accurate and complete is not cheap. Sarah Kliff at The Washington Post’s Wonkblog spoke with a representative from the supermarket chain Kroger about this mandate, and here is how she summarizes what the chain must do to comply with it:
… Krogers would need to spend $20 million to come into compliance with the new regulations. And it’s not just about buying poster board and listing calorie counts. It’s about figuring out how many calories each item has to begin with.
She continues, adding that the representative himself elaborated on the wide-ranging impact that this mandate will have for his business:
… We might have thousands of SKUs for birthday cakes and thousands of types of prepared pizza. The problem is it forces us to label all of that, down to the olive bars and salad bars.
Restaurant owners too must bear a significant burden from this mandate. Melissa Cummings, a representative of the nationwide pizza chain Domino’s, estimated that putting calorie counts on menu boards would cost as much as $4,800 a year per store. Problem is, according to Cummings, this cost is 10 percent of Domino’s profits.
If enough consumers truly value knowing the precise number of calories in the items that they order at restaurants, then businessmen have an incentive to find a cost-effective manner to provide such information to consumers. This is why today there are numerous Apps offering detailed calorie information on popular fast food restaurants and why many restaurants advertise low-calorie menu options. If the government did not get involved, businessmen would be free to choose to display information when they calculate that it is in their interest to do so, and they would be free to not display such information when they estimate that it is not worth the cost.
But the calorie display mandate disregards the rights and interests of such businessmen, and instead orders restaurants and supermarkets to bend over backwards to provide detailed caloric information. This is yet another measure in which lawmakers tell businessmen “my wish is your command,” and businessmen are treated as if they have no right to say no.