Why Smaller retailers want changes to the FDA Menu Labeling Rules
November, 2017 – Earlier this month, The Food and Drug Administration (FDA) released a draft supplemental guidance on menu labeling. Comments on the guidance will be due on January 8, 2018 and the menu labeling requirements will be enforced by the FDA beginning May 7, 2018. The Obama-era rules call for the posting of calorie counts on menus and signage in restaurants, supermarkets, c-stores, pizza chains and vending machines. The regulation will apply to food-service establishments and supermarkets that have 20 or more locations.
Several industry groups have voiced concerns that the 36-page document fails to address perceived weaknesses in the rules and are hoping that Congress will act to alter the menu labeling regulations.
The “Common Sense Nutrition Disclosure Act” (H.R. 772) has been reintroduced by Reps. McMorris Rodgers (R-WA) and Cardenas (D-CA) and by Senators Blunt (R-MO) and King (I-ME) in the Senate, (S. 261). The act would give retailers flexibility in complying with the menu labeling regulations. Should the measure become law it would:
Allow retailers to identify a single primary menu while not having to include nutrition labeling in other areas of the store.
Clarify that advertisements and posters do not need to be labeled
Provide flexibility in disclosing the caloric content for variable menu items that come in different flavors or varieties, and for combination meals.
Ensure that retailers acting in good faith are not penalized for inadvertent errors in complying with the rule and it would stipulate that individual store locations are not required to have an employee “certify” that the establishment has taken reasonable steps to comply with the requirements.
One area of concern is that the menu labeling rules are costly and would especially harm single store operators and small businesses. This is because the rule covers any retail establishment with 20 or more locations that sells food that is intended for consumption soon after being purchased. So, whether the rule applies to a business depends upon whether that business is part of a chain with 20 or more locations doing business under the same name, regardless of the type of ownership, the number of establishments owned and operated by a company/individual is not relevant to this criterion.
The key is whether there are multiple locations doing business under the same name. For example, if a retailer owns three convenience store businesses and there are no other businesses with that name, those stores are not covered. However, as is more often the case, if a retailer owns three stores all with a branded name then those three stores do meet the criteria. Many operators of single stores or of only a few stores will have to comply with all of the menu labeling requirements.
Across the industry there is a fear that Congress may not act on The “Common Sense Nutrition Disclosure Act” and that the Trump Administration may implement the rules in a manner similar to to what the previous administration planned. As written, violations of the regulation can carry civil and criminal penalties of up to a $1,000 fine, one year in prison, or both.